Making a Will

Domicile, Taxes and Wills "There is nothing so certain in this life as death and taxes" The first is absolutely certain!  The second is also certain but we have the opportunity to minimise the various taxes imposed under whichever jurisdiction we are governed at the time of death.

Domicile of Origin: Everyone obtains a place of domicile at birth. If you were born in the UK, legally, you are UK domiciled. However, this is subject to 'domicile of dependency' which is attributable only to children under 16 years of age.  The domicile of origin changes to a domicile of dependency when the domicile of the parent changes.  In such a situation the domicile chosen by the parent becomes the domicile of the child. There are many common misconceptions relating to making a Will: "It is too expensive", everything I own will automatically pass to my spouse or my children" or "my assets are too insignificant". In the event of your unfortunate demise, without having made a Will the "Intestacy Rules" apply in a rather arbitrary manner, particularly if you do not have any children.  This may lead to your loving and faithful spouse having to share your estate with "unseemly" relatives whom you certainly never intended to benefit. Domicile of Choice: If you have relocated permanently to Spain, in order to renounce your UK domicile of origin you need to sever all ties with the UK.  This means giving up your British passport, advising the Inland Revenue authorities, relinquishing club memberships, selling your burial plot, etc.  You would then be free to obtain Spanish domicile through the appropriate channels. Having Spanish "residencia" does not necessarily mean that you are Spanish domiciled. Succession Taxes: UK Inheritance Tax ("IHT") is currently chargeable at 40% on the excess over the nil rate band allowance (currently £300,000 for the period 2007/2008) on worldwide assets.  Spanish succession tax may also be payable on assets held in Spain.   A "double taxation treaty" exists between Spain and the UK and tax paid on Spanish assets can be offset against IHT paid in the UK. There are two rules by which a person may be deemed to be domiciled for IHT in the UK: 1. He or she was domiciled in the UK within 3 years immediately preceding the "relevant time" or 2. He or she was resident in the UK in not less than 17 out of the 20 years of assessment in which the "relevant time" falls. "The relevant time" is defined as the time at which the domicile is tested, for example, the date of death. Wills: Do you have a valid UK Will? A Spanish Will is not legally required if you have a valid UK Will which is made in respect of your "worldwide" assets. Spanish succession law is dictated by the Civil Code, unlike the testamentary freedom enjoyed in the UK. If you have a Spanish Will and you are Spanish domiciled, you can only pass one third of your estate to whom you wish and the remaining two thirds pass to your natural heirs. There is a common misconception among many that the surviving spouse would automatically inherit the Spanish assets. A UK citizen can make a Spanish Will with the same testamentary freedom as in the UK. The Spanish authorities will accept the contents of that Will in accordance with UK law. However, the content of your Spanish Will can be open to challenge through the courts by disgruntled beneficiaries. We strongly recommend that if you have Spanish assets, you make a Spanish Will that compliments your UK Will and on the condition that it is made in respect of your Spanish assets only, it will not supersede your UK Will. To discuss making a will or for a revision our contact numbers and address details can be found using the link: - Contact us

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