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Expats living in Spain to be affected by EU inheritance law
| Published: | 26 May at 4 PM |
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Expats in Spain could see their estates handed out against their intentions and their families having to fork out more tax than they should if they have not made a will.
Spain is the most popular destination among emigrating British retirees, with thousands relocating to the Mediterranean nation each year. However, many remain completely unaware that the inheritance laws in the two countries are entirely different, and are all set to change once more.
Spanish laws determine who the inheritor should be when a person who has not made a will passes away, and these regulations apply to British expats too.
But the good news for Brits in Spain is that this law is due to change in August after the European Union Succession Regulations passed a proposal in 2012 offered expats the chance to opt out of these inheritance rules, even though the inheritors will still be made to pay tax on what they receive.
The new regulations also apply to Brits residing in France, Portugal and Italy.
While in the UK, spouses have inheritance tax exemption and the tax is paid from the deceased’s estate, complicated rules on the continent determine who pays how much tax.
In Spain, succession tax must be paid if the inherited asset – such as a pension fund – is in the country and the heir resides overseas. Likewise, if the heir lives in Spain and the assets are overseas, British inheritance tax may also have to be paid.
Spain is the most popular destination among emigrating British retirees, with thousands relocating to the Mediterranean nation each year. However, many remain completely unaware that the inheritance laws in the two countries are entirely different, and are all set to change once more.
Spanish laws determine who the inheritor should be when a person who has not made a will passes away, and these regulations apply to British expats too.
But the good news for Brits in Spain is that this law is due to change in August after the European Union Succession Regulations passed a proposal in 2012 offered expats the chance to opt out of these inheritance rules, even though the inheritors will still be made to pay tax on what they receive.
The new regulations also apply to Brits residing in France, Portugal and Italy.
While in the UK, spouses have inheritance tax exemption and the tax is paid from the deceased’s estate, complicated rules on the continent determine who pays how much tax.
In Spain, succession tax must be paid if the inherited asset – such as a pension fund – is in the country and the heir resides overseas. Likewise, if the heir lives in Spain and the assets are overseas, British inheritance tax may also have to be paid.
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