Examples

Mr & Mrs Happy are Non Resident in Spain. Their main asset is a villa worth 150,000 euros.
Sadly, Mr Happy dies. Thankfully, he had made a Will, appointing his wife as sole beneficiary, and their three children as Substitutes. His taxable estate amounts to half the value of the jointly-owned villa – or 75,000 euros.

Two potential scenarios could apply:

1. Mrs Happy can elect to take her deceased husband’s full estate. She will be granted a 16,000 euro allowance, leaving an IHT bill payable of about 6,000 euros.

2. Alternatively, Mrs Happy may decide to pass her late husband’s estate directly to her children, utilising the substitution clause. In this case, each child will pay around 696 euros. The final IHT bill in total will be approx. 2,088 euros. In order to do this, she must renounce her rights in entirety, allowing the next in the list to supersede her. Mrs Happy cannot take part of her husband’s estate and leave the rest to her children – she must renounce it all (but do not forget she is still the owner of her own half share).

Mr Smile is single, and decides to leave his Spanish apartment to a good friend of his. It is worth 75,000 euros. When he dies, the friend will have to pay IHT of some 16,836 euros.

As you can see, the amounts payable in different circumstances can vary very significantly. It is therefore absolutely essential for clients to discuss their hopes and expectations with us, and for us to draft a Will accordingly.

MAM welcomes new and existing clients. We look forward to hearing from you and to helping you benefit from our many years of experience. Wills and Inheritance Rules are extremely complex, and under no circumstances should anyone attempt to “go it alone”.

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