April 11th, 2014
Spanish tax law can undoubtedly lead to very unfortunate fiscal consequences in the event of inheritance by beneficiaries who are unrelated to the deceased- including unmarried / same sex partners, particularly if the relationship is not ‘recognised’ with civil status.
So, the bad news is that advisers who warn of the exposure to Spanish Succession Tax rate of 80% (or even slightly more) are confirming what could theoretically happen.
However, it should be stressed that such a high rate of taxation would only apply in the very worst Spanish tax case scenario. For example, with a very high value Spanish estate; already wealthy beneficiaries; and no family or marriage connection between the deceased and the beneficiaries.
But in any event, even with Spanish estates of more modest value, the impact of Spanish Succession Tax can still be unexpectedly harsh. So, it’s clear that planning is essential in all family situations involving Spanish property ownership, to prevent the risk of legally avoidable Spanish tax liability arising.
Advising non-Spanish owners of Spanish properties is complex and specialised area of Spanish legal practice, and without the correct advice, major Spanish tax problems can easily arise.
We are happy to talk through any potential cases (without obligation). Together we can explore the solutions that are available to achieve succession wishes, in a tax efficient manner.