Tuesday, 14 April 2015

Inheritance tax in Spain

Inheritance tax in Spain follows a different process to that of the UK and other countries.

Key Differences

One of the key differences in Spain is that there is no spousal expemtion meaning if an asset is held jointly the joint owner must pay IHT ( death duties) on the part of the asset held by a joint deceased owner. This is immaterial of whether the owner is living in Spain or is non resident of Spain and whether or not spousal exemption would apply in their own country.

Whilst the rules of the country of birth will follow for the Spanish asset, death duties are payable at death in Spain.

A second and fundemental difference is that death duties are the responsibilty of the beneficary not the estate.  In order to take over an asset bequeathed, the inheritor must first pay any taxes due. It is not possible in Spain without agreement from the tax office to sell the asset in order to pay death duties.

Why make a Will in Spain

When considering buying in Spain the purchaser should consider what will happen in death, who the property will be left to and their ability to pay death duties. If there is a Spanish Will in place this should match any Will made out in the normal country of residency ( where the buyer was born).

A Will for the asset or assets held in Spain will speed up the probate process significantly. If no Will exists in Spain the process of probate will be longer, more complicated and more costly. Finally the closest relatives will inherit as stipulated by the rules of the country by which the deceased was born but a Will being in place will assist this greatly.

Appointing a Lawyer

The benefits of apppointing a Lawyer to write a Will in Spain are threefold. Firstly a Lawyer will ensure there are no contradictions with any other wishes held in other Wills, secondly they can advise on the best way to minimise death duties and thirdly they can ensure at death, as the executor of a Will that matters progress as the deceased would have wanted and with the least pressure on the beneficary who may not be in the best place to deal with matters at that point.

Read the full article :  Inheritance tax in Spain the facts and the fiction

Friday, 10 April 2015

Transfer of Property Rights February 2015

February Sales Figures

Data out this week shows that property purchases in Spain continue their upward trend.

Year on year residential transfer of ownerships are up over 15%. Overall total transfers were only up 5% as other types of trasnfer types and commercial property sales remained stagnant.

Dwelling sales made up over 65% of all sales and only the Canaries when looking at areas attractive to overseas buyers showed a decrease in the month.

Sales in February were lower than January by 11% but this is a normal trend when looking over the last 5 years. Only in 2011 were there more sales in the month of February than January so the data should not casue any concern that an improving sales market will not continue.

Sales by Region

Andalucia as normal had the most property sales within the month and Cataluna, Madrid, the Balearics and Valencia all performed well.

Increased activity from buyers in Spain looks set to continue through 2015 as prices have bottomed and the Euro remains under pressure against other currencies.

Other Titles

One slighty worrying statistic is that the amount of property transfered under the heading of other titles includes where Banks have taken over property from defaulted mortgage holders remaines a very high percentage of overall transfer of ownership. This area is equivalent to 30% of the amount of home sales and some 19% of all property transfers.

Read the full article: Purchases of homes in Spain