Article date: 6 November 2007
- Thousands of Brits buying Spanish property unaware of intricacies of Spanish inheritance tax law
- Norwich Union International produces advice to support intermediaries in conversations with consumers
Responding to heavy demand from advisers, Norwich Union International (NUIL) has produced a guide - Spanish Inheritance: A Little Known Problem for UK Residents - to support intermediaries on the complexities of Spanish inheritance tax law when advising consumers on planning their dream home in the sun.
Each year an estimated 60,000 UK residents buy a property in Spain1, as a holiday home or permanent residence and, whilst recent press has raised the issue of the conveyancing side of buying a property in Spain, many expats are unprepared for the intricacies of Spanish tax law. As a customer-focused company, NUIL has responded with an effort to educate advisers so they can better discuss the topic and ensure that, for Britons leaving the UK for a life abroad, the reality lives up to the dream.
It has become evident that many would-be expats don't seek advice before buying a Spanish home, and with little knowledge of the financial implications and crucial tax differences. For example, there is, on the whole, no spousal exemption which means individuals passing a property to their spouse will be liable to a tax bill unlike the exemption existing in the UK. Savvy buyers may be influenced by certain locations that allow limited exemptions on the inheritance tax rule but, feedback to Norwich Union has shown that buyers are largely in the dark about the differences in tax law.
The guide also raises awareness of other essential information, including:
- Spanish residents are liable to inheritance tax on their worldwide wealth.
- The tax liability has to be paid by the person(s) receiving the assets, not by the estate of the deceased.
- Spanish inheritance tax is based in residency and not domicile.
- The asset inherited cannot be sold until the tax is paid, not can it be used as collateral.
Nicholas Burton, marketing manager at Norwich Union International, comments: "Norwich Union International became aware that advisers were seeking support on Spanish inheritance tax as growing numbers are investing in property abroad but many of these people are unaware of the tax implications of their investment or, in some cases, not even seeking advice. We're keen that these decisions are not left to chance and so decided to take positive action to raise awareness of the implications for the benefits of our customers."
To download a copy of Spanish Inheritance: A Little Known Problem for UK Residents please visit www.nuinternational.com and click on ‘literature library'.
For further media information, please contact the Norwich Union press office:
Telephone: 01904 452791
Mobile: 07800 692935
Telephone: 0207 662 3624
Mobile: 07800 691935
Notes to Editors:
¹ Tax liability will depend on individual circumstances and the rules may change in the future.
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