Minimising your Liability for Inheritance Tax

You should seek professional legal or fiscal advice from a lawyer or accountant specialising in Spanish tax regulations to discuss the most suitable arrangement for you and your heirs. These are some of the options that may be suggested.

Setting up a corporation which owns the property with family members as shareholders. When one member dies no property actually changes hands because it is owned by the corporation. The property is redistributed by simply transferring some of the shares to other family members, an operation that only requires a small tax payment. It should be noted here, however, that a special tax of 3% is levied on off-shore companies based in tax havens.

Putting more members of the family, like your partner and children, on the title deeds is an alternative. By doing this you make each beneficiary’s share smaller and increase the number of tax allowances that are applicable thereby significantly reducing the tax your beneficiaries will have to pay. However, this option may become problematic if you want to sell the property because this requires the consent of all the titleholders.

Remortgaging the property may be advisable in some cases in order to minimise liability for inheritance tax.