Wills and Inheritance tax in Andalucia


WHY DO YOU NEED TO MAKE A WILL IN SPAIN If you have property in Spain we strongly recommend to think ahead and make a Spanish will. In general, it is an uncomplicated and affordable process that will save some costs and even taxes, in some cases to your heirs. Te Will that you make in Spain will be compatible with any other will that you have made in your home country or anywhere else. Te Spanish will is a separate public document stating your wishes only related to your assets located in Spain. Draſting a will must be part of your estate planning which should always start when you make a decision to buy Spanish property. Below are the advantages to make a will in Spain: · It is exclusive to your assets located in Spain. It does not interfere with other wills made somewhere else. · It should be written in your language for peace of mind and it is filed safely. · It will save your heirs an important amount of hassle, work, money and time when they need to start the process and have a deadline. ·Your national law will govern your Spanish will, so you do not have to follow the Spanish legal obligations for the forced heirship rules. · It will be signed with a Spanish notary public and it can be changed and replaced as many times you need to do so as family circumstances could change. Te latest will is the valid one. · As part of Estate planning, it can save some Inheritance tax burdens in Spain in


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some circumstances. Please note an important modification introduced in August 2015. (European Regulation 650/2012) Te EU new inheritance legislation provided that EU citizens who are residents in Spain will be subject to Spanish Succession Law, regardless of their nationalities, unless they specifically state in their will that they wish for the succession law of their own country to apply. Te Spanish law of compulsory heirs dictates that set percentages of an inheritance must be leſt to the children and the spouse. Tis is the difference to the law in the UK that allows testator to leave their estate to whoever they wish. If you have already made a will in Spain and are resident there, but do not have Spanish nationality, then it is important to take advice and check if you need to change it so that you can specifically state that you wish your own country´ laws of succession to apply, so that you are able to leave your assets to the people of your choice. Tere are three different types of Spanish wills. However, the most common type is the “open will” which should be draſted by your Spanish lawyer and translated into your own language.


INHERITANCE TAX IN ANDALUCIA Aſter many years of fighting with the Andalusia government about the reduction of the Inheritance tax, the regulation finally came into force in January 2018, introducing a significant change for succession and giſt tax. Te Inheritance tax in Andalusia is based


in some factors i.e. the relationship with the deceased, the country of residence, the pre-existing wealth of the heir and so on. Te most important change introduced in January 2018 was the reduction of the tax in 1.000.000 euro. In other words, those beneficiaries included in Group I and II, that is, spouses, children, grandchildren and parents of the deceased will benefit from a nil rate band of 1.000.000 € Tis means that the vast majority of estates in Andalucía, including foreigner citizens residents in the EEE with assets in Andalucía, are exempt from inheritance tax in Spain. It is important to take into consideration that the 1 million reduction will only apply if both the following conditions are met: 1. Te beneficiaries must be included in Group I and II: spouses, children, grandchildren and parents. 2. Te beneficiaries’ pre-existing wealth is no more than 1 million €. Please note that for Spanish resident beneficiaries, worldwide assets are taken into account for this purpose, but for non residents, only Spanish assets would count. Any amount exceeding the 1.000.000 € reduction will be taxed at a rate according to the scale from 7,65% to 36,5% in Andalucia plus the multipliers related to the Group III and IV and pre-existing wealth. Te new rules implemented in the Inheritance tax in Andalucia must be taken into account when draſting the Spanish will.


For more information, please contact Premier Law info@premierlaw.net


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