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Inheritance Tax - the Voluntary Tax


We are all in pretty much agreement that Inheritance Tax ( I.H.T.) is high in the U.K but it is even worse here in Spain!

Over the last decade, property values in Spain have increased significantly and there are a high number of expatriates who own their Spanish properties outright, thus giving them a Spanish asset of considerable value.

In contrast to the U.K. or the U.S. systems, Spanish I.H.T. does not tax the estate of the deceased, but taxes the real value of the portion received (i.e. property) by each heir.

There is NO EXEMPTION BETWEEN HUSBAND AND WIFE, therefore with the death of the first, the value of the property is divided in two.

On a property value of €500,000, the tax due would be €43,000 and this must be paid before selling the property. (The survivor is likely to benefit from a small allowance as beneficiary of €16,000)

When the surviving spouse dies, I.H.T. is again payable and this time on the whole 100% of the value of the home, this must be paid before selling the property. This translates into a further €116,000 I.H.T. to pay. Subsequently a total I.H.T. bill of €159,000 – over 40% of the property value!

Q. Do you own your Spanish property?

Q. Do you want your family to inherit your Spanish Estate?

Q. Would you like supplementary income?

Q. Do you want to mitigate Spanish Inheritance Tax?

If you are nodding your head to these questions then you would find a meeting with a fully qualified independent financial advisor extremely beneficial.

Janet Knight (a senior consultant with Offshore Investment Brokers) states “Many of my clients know friends or family who have died in Spain, leaving their spouse and heirs an horrific tax bill. Usually they are unaware of the large amounts involved and are mistakenly under the impression that the property can be sold to pay the I.H.T. due.

The death of a spouse is devastating enough without the added burden and pressure of paying taxes. (Penalties will be applied if the tax is not paid within six months). There are ways to mitigate the Inheritance Tax problem which many of my clients have found invaluable – forewarned is forearmed!”


Janet Knight (M.L.I.A..dip, FAIQ II) is an independent financial advisor with Offshore Investment brokers, accredited by the Chartered Insurance Institute (C11).

For more information on Inheritance Tax Planning and other financial advice, tel. Janet Knight on 639 067 704 or 952 798 002
or email her on