Spanish Taxation
Income Tax
The tax year in Spain runs from January to December, and your tax return is due a year in arrears and you file your return between 1st May and 30th June.
At present, if your income is less than approximately €8,000 you do not have to file a return, but it is always worth checking this out with a tax accountant or independent financial adviser. Your worldwide income is taken into account, and even though those with UK civil pensions, such as Army, Navy and RAF, police and Civil Service have to pay their tax in the UK, credit will be given in Spain for tax already paid.
For details of personal allowances and benefits against tax, such as tax relief on mortgage interest against a mortgage used to purchase a property, please contact me on the numbers given on the main page.
Inheritance Tax
Spanish "Succesion Tax" works in an entirely different way to the UK, particularly between husband and wife.
In Spain, your worldwide assets are transferred to your spouse on death, in accordance to your will and how the assets are owned.
For example if you jointly own a house with no mortgage valued at say €200,000, each party is deemed to own half.
If you are not registered as tax resident in Spain, which you must do if you live 183 days and more each year, you will only get €15,956 allowance against the inherited half of the house, so you will have to pay tax on €84.044, which will be approximately €9,838. If your in the Spanish tax system and have been for 3 years, you earn higher allowances, depending in which province you live. In Murcia you get an additional €50,000 on top of the €15,956. In Valencia Province it is as much as €178.606 maximum, which would eradicate the problem on first death, in the example I have used.
For more information on the implications on second death, please contact me for a free consultation.