There is a very famous saying that goes as follows;

‘ASSUMPTIONS are the Mother of all mistakes’!

This applies so often when it comes to Estate Planning or, more to the point, protecting against INHERITANCE TAX in Spain.

As an example, many British citizens moving here expect the IHT tax system here to be the same as in the UK. That is;

1. Spouse exemption on the family home (the surviving partner pays NO tax on the main home)
2. Deceased Allowance of £285,000 (soon to be £300,000 wef from 2007)

Nothing could be further from the truth! In Spain;

1. The is NO spouse exemption on the family home or any other asset
2. The deceased has NO allowance; it is the Beneficiaries that have the allowance and, for
       Non-Residents of Spain, this is ONLY €16,000!

The result is a common and often repeated mistake; people buy the Spanish property for ‘cash’ and walk straight into an IHT problem!

The solution? Simple! ALWAYS, ALWAYS, purchase with a Spanish Euro Mortgage and keep as much of your capital out of Spain!

For more information, contact one of our advisers!

INHERITANCE TAX IS OFTEN CLASSED AS ‘VOLUNTARY’ BECAUSE IT CAN BE AVOIDED!