1. INHERITANCE LAW IN SPAIN FOR FOREIGN CITIZENS
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This law firm has the pleasure to line out some notes that should be taking into regards to granting of a Spanish Will and some details to take into account concerning the tax implications of the corresponding Inheritance in Spain.
Arcos & Lamers Asociados provide legal advice to non-tax residents in Spain at the time of granting a Spanish Will that will ease the legal procedure of Inheritance acceptance of those assets located in Spain and to avoid unnecessary delays as well as future contingencies for the inheritors.
The Spanish Will shall state that it disposes only of those assets situate in Spain.
As per the Spanish legislation, at the time of your decease, the law applicable is the national law of the deceased (art. 9.8 Spanish Civil Code). Therefore it would be your national inheritance law which governs your inheritance situation of all your assets (also those located in Spain), being able to leave your estate to the person of your choice, but always complying with your own national law.
You should also confirm that your own national inheritance law is governed by the principle of free disposition of your assets by Will.
It may be possible that the national inheritance law remit to the law of the country where the assets are located (Spanish law). If this were the case, the Spanish Inheritance law establishes, in general terms, the following partition of the estate:
– 1/3 “Legítima”: The “legítima” is that share of the state that must be left in equal parts to compulsory heirs, i.e: primarily children and spouse.
– 1/3 “Mejora”: The “mejora” is the share of the state that can be left to one o more compulsory heirs, to improve the “legítima”. The difference with the “legitima” is that the testator can choose to whom of the compulsory heirs can improve with this share of the state.
-1/3 “Libre disposición”: This would be the third share of your state which you are free to dispose.
The Spanish Inheritance law establishes the principle of free disposition of your assets by Will which means that you would be entitled to grant a Will, respecting the 1/3 of “Legitima” and 1/3 of “Mejora”, (in case that your national law remit to the Spanish law).
B. REQUIREMENTS AND FORMALITIES OF THE SPANISH WILL
Arcos & Lamers Asociados provide legal advise to our client to grant the Spanish Will called “Open Will” signed before a Civil Notary Public in Spain. This would be the most common, but as well, the most recommended format due to the fact that the same is directly enforceable, and will allow to your inheritors to initiate the Acceptance of your assets in Spain, immediately after your decease.
The Open Will can be signed in double column format, Spanish and the language of your choose. The document must also be translated and signed by a translator.
Once signed, the Notary keeps the original Will in his records, and provides you with an authorised copy of the same.
Finally, the Notary sends a notification to the Central Registry of Last Wills in Madrid (“Registro Central de Actos de última voluntad”), where the name of the testators, the protocol number of the Notary and the date of the granting of the Will is registered.
This notification will allow to the inheritors to localise a copy of the Spanish Will after your decease.
C. FISCAL IMPLICATIONS
Although your National Law is applicable for the distribution of the Spanish assets, from a Fiscal/Tax point of view, your inheritors will be liable to Spanish Inheritance Tax. In general terms, the Spanish Inheritance Tax would be rated on assets located in Spain only (properties, bank accounts, vehicles, insurance policies, etc).
The Inheritance tax has to be settled within the 6 following months after the decease.
The tax is payable by the inheritors and not by the inheritance (estate). This means that the tax should be paid before the inheritors can deal with the assets of the inheritance.
- Whether the estate includes deposits in a Spanish Bank account, the inheritors would have to settle the tax before they can access to these deposits.
- Or, if the inheritors desire to sell a property in Spain, they first will have to settle the inheritance tax.
It is necessary to value the assets and liabilities, taking into account the market value of the assets at the time of the death. The total sum, deducted the charges, will be then liable to tax (expenses of the funeral can also be deducted).
Spanish Inheritance Tax reductions. The Spanish inheritance tax establishes a minimum exemption over the tax to be paid, depending of the relationship between the inheritors and the deceased:
- Group I: Descendants, adopted children under 21 years old: General exemption of 15.956,87 euros, plus € 3,990.72 per the number of years to arrive at age 21, per a maximum exemption of 47.858,59.
- Group II: Descendants, adopted children over 21, parents, adopted parents: exemption 15.956,87 euros.
- Group III: Collateral of 2º and 3º grade: brothers-sisters, nephews-nieces, aunts-uncles: exemption 7.993,46 euros.
- Group IV: Those not mentioned in group 1, 2, 3 above, friends, etc: No exemption.
Once the above tax exemptions have been deducted, the Inheritance Tax will be applied on the remainder of the inheritance in Spain, as per the following tax rates schedule:
(*) This scale is applicable for Spanish assets located in the Andalucía Region (Comunidad autónoma Andaluza).
NOTE: The above mentioned information has been produced by Arcos & Lamers Asociados, Spanish tax lawyers, accountants and tax advisors in Marbella. The same is issued for informative and guidance purposes only and it is not legally binding as this information is drawn up taking into account Spanish tax legislation in force at the time of drafting the present. The same or part of the contents of the same should not be reproduced, nor given to third parties, without the authorization of Spanish Law firm Arcos & Lamers Asociados. This Spanish law firm is situated in Marbella, from where services throughout Spain are developed.
Please do not hesitate to click into www.arcos-lamersasociados.com for additional information. Or to approach Arcos & Lamers Asociados directly in order to apply for a first free legal-tax consultation. your solicitors in Marbella, Málaga, Spain.
ARCOS & LAMERS ASOCIADOS
AVDA. RICARDO SORIANO Nº12
EDIFICIO MARQUÉS DE SALAMANCA,1º-3.
TEL:+ 34 952775010
Marbella, April 2012.
- Costa del Sol Accountants, Inheritance Marbella, Marbella Economist, Property Lawyer in Marbella, Tax Advice Marbella,