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InheritingSpanishProperty

Inheriting a Spanish property

This article is based on the assumption that the deceased was a UK national however, we can also assist the beneficiaries of Spanish property from all over the world. If you need help in dealing with the inheritance of a Spanish property or other assets in Spain, contact us on (+44) 01244 470339 or email info@worldwidelawyers.co.uk    

If you are dealing with the inheritance of a Spanish property, one of the first things you will need to do is ascertain whether the person who died owning the Spanish property had a valid will.

It could be that:

  • The deceased has a Spanish property and there is only an English will
  • The deceased has a Spanish property and there is only a Spanish will
  • The deceased has a Spanish property and there is a Spanish will and an English will
  • The deceased has a Spanish property and no will
  • The deceased has a Spanish property and a will from a country outside of the UK and Spain (this is beyond the scope of this article but certainly something we can assist with contact us on (+44) 01244 470339 or email info@worldwidelawyers.co.uk for assistance).

In each case the process of how to deal with the inheritance of a Spanish property is different. We have set out below some information based on each scenario.

You are inheriting a Spanish property and there is only an English will

If the deceased was English but owned property in Spain, you may find that the deceased just had an English will. In this event, it’s necessary to first obtain a Grant of Probate in England.

As part of the application for the Grant of Probate in England you’ll need to provide a list of the all of the assets the deceased owned and their values (this includes the Spanish property and any other assets owned in England or in any other country). Once the Grant of Probate is obtained and the UK inheritances taxes are settled (if there are any due to be paid) it’s then possible to deal with the Spanish assets.

Your Spanish lawyer will require an original death certificate and original Grant of Probate, both of which must be stamped with the Apostile of The Hague at the Foreign & Commonwealth office. These documents must be translated into Spanish, which your lawyer in Spain will usually be able to arrange. In order to act on behalf of the beneficiaries in Spain, your lawyer in Spain will usually require all the heirs/ beneficiaries to sign a power of attorney authorising them to act for you. A power of attorney is a document that can be signed before a notary in either Spain or the UK.

Your Spanish lawyer will deal with the probate process in Spain from there.

There is Spanish property and there is only a Spanish will 

You will need to provide your Spanish lawyer with a copy of the death certificate so that a search for a Spanish will can be carried out.

Your lawyer in Spain will then visit the Spanish equivalent of the Births, Deaths & Marriage Registry to obtain a certificado de ultimas voluntades (also known as a certificate of last wishes). This is to ascertain whether or not the deceased had a valid Spanish will and, if so, where the will is located so that a copy of the Spanish will can be obtained.

To obtain a copy of a Spanish will, the beneficiaries will need to appoint their Spanish lawyer as power of attorney or at least one of the heirs will need to visit the Spanish Notary in person with their passport.

Once the death certificate, certificate of last wishes and authentic copy of the Spanish will have been provided the next step is to obtain a list of all the Spanish assets with their values.

With regards to Spanish property you will need to provide a copy of the deeds of the Spanish property also known as the Escritura de Compraventa and a receipt of the Town Hall rates known as the IBI (Impuesto de Bienes Inmuebles), so that the taxable value of the property can be established. Once the valuation of the estate (there may be other assets included such as a bank account, car etc.) has been confirmed, your Spanish lawyer will calculate the Spanish inheritance tax owed.

You lawyer in Spain will then arrange an appointment with the local Spanish Notary to sign the deed of acceptance of the inheritance, which is a document that outlines: the date of death of the deceased; all the Spanish assets; and the beneficiaries of the assets.

If you have given power of attorney to your Spanish lawyer, they will be able to sign the deed on your behalf. If not, then you will need to visit to Spain to sign the deed at the local Notary office. Once the deed has been signed your lawyer will arrange payment of the notary fees and then pay the Spanish inheritance taxes. Inheritance taxes in Spain can be settled using money held in the deceased’s Spanish bank account (if there is one, and the funds are sufficient), which your lawyer in Spain can arrange with the bank. If there are not sufficient funds these taxes must be paid by the beneficiaries.

Once any Spanish inheritance tax owed has been paid and the tax form stamped your Spanish lawyer can arrange either the transfer of the property into names of the beneficiaries or the sale of the property. In order for the property to be transferred into your name and for your lawyer to pay to pay the inheritance tax in Spain on your behalf you will require an NIE number, which your Spanish lawyer can help you obtain.

There is a Spanish property and both a Spanish will and an English will 

It is usual for people who own a Spanish property to make a separate Spanish will to make it easier for their executors and beneficiaries to deal with the inheritance of the Spanish property and other assets.

Therefore, if there is both a Spanish will and an English will, it will usually be the Spanish will that is relevant to deal with the Spanish estate. Consideration should, however, be given to the wording of each of the wills to ensure that only one will covers the Spanish property. Ideally the English will should state that it is limited to assets other than those located in Spain so that it is clear that the relevant will to deal with the property in Spain is the Spanish will. Likewise, it should be clear that the Spanish will only covers the Spanish assets (if that was the intention). Otherwise it could be that one will has the effect of revoking the other so that there remains only one valid will.

If there in any ambiguity or conflict between the beneficiaries, specialist advice should be sought.

Once it has been ascertained which will applies to the succession of the Spanish property, your Spanish lawyer can then deal with the estate accordingly as per the Spanish or English will as set out above.

There is a Spanish property and no will

If the deceased owner of the Spanish property did not leave a will, and was a UK national then a Grant of Letters of Administration will need to be obtained in the UK. The inheritance of the Spanish property can then be dealt with in accordance with the laws of the country where the deceased was habitually resident.

Spanish inheritance tax on inheritance of property in Spain

It will need to be ascertained where the deceased was domiciled, where they were registered for tax purposes and where they spent most of the year. Once this information is confirmed it can be determined which inheritance taxes will be owed.

It may be possible that inheritance taxes are owed in both the UK and Spain. There is, however, a double tax treaty between Spain and the UK so inheritance tax on the same assets is not paid twice.

In some circumstances beneficiaries may have to ‘top up’ the inheritance tax payable in Spain as Spain’s inheritance tax laws, the inheritance tax rates and tax allowances differ from region to region.

Dealing with the inheritance of Spanish property can be complicated and in order to ensure matters are dealt with properly it is important to seek proper advice from lawyers who are used to dealing with cross border estates.

If you’re dealing with the inheritance of a Spanish property (or other Spanish assets) and you’re not sure whether you need a Spanish lawyer, an English lawyer, both or neither contact Worldwide Lawyers for FREE no obligation advice on 01244 470339 or email info@worldwidelawyers.co.uk  

 

News-5-Will

Waiving a foreign inheritance

If you are the beneficiary or heir of an estate with assets abroad, it may be that you do not want to receive the inheritance and would like to waive or refuse your right to receive the foreign inheritance.

There are a number of reasons why a beneficiary may want to reject their inheritance, such as:

  • Accepting an inheritance may mean that you inherit not only the assets but also the debts too. This is the case in countries such as Spain, Italy, Germany and many others too. So, in circumstances where the value of the debt outweighs the value of the assets, it can be advisable to waive your inheritance.
  • Inheriting an estate may create an additional inheritance tax liability for you or your own estate and you may feel that renouncing the inheritance in favour of another person (e.g your children) would be more tax efficient.
  • You just don’t need the money or feel that others are more in need and would prefer to disclaim your inheritance so that someone else benefits.

Can you disclaim a foreign inheritance?

The ability to waive a foreign inheritance and the process to be followed all depends on the national law that applies to the estate. Determining which national law applies to the estate is crucial and should be ascertained before you decide whether to accept or decline the inheritance.  The applicable law will determine the effect of the waiver and the process to be followed.

How do you disclaim a foreign inheritance?

It is usually the case that you must take steps to formally renounce the inheritance otherwise, if you do nothing, you may be deemed to have accepted the inheritance after a certain period of time.

To waive your inheritance, some form of formal written waiver or disclaimer of interest is therefore usually required. This waiver/disclaimer will usually be prepared by the lawyer/notary in the country where the estate is located. The formal waiver will usually need to be signed in front of a Notary Public in that country or in your own country or at an embassy/consulate.

There is usually a legally specified time period in which you must submit the disclaimer, which can vary from a few months up to several years depending on the country. The time period can also be different for beneficiaries who live abroad.

What should you consider before waiving a foreign inheritance? 

In some countries, including Italy, Spain and Greece, a waiver of an inheritance must be total and cannot be partial. So, if you choose to reject your inheritance you must waive your right to the entire inheritance. For example, if there are assets in one country and debts in another, you cannot accept the inheritance in one country and refuse the inheritance in another. However, in some instances and some countries, such as France, you may be able to disclaim only some aspects of the inheritance.

Disclaiming a foreign inheritance can have serious implications for your own heirs. For instance, if you wish to waive an inheritance because the estate is burdened with debt, this debt may pass on to the next in line to inherit. If they choose to waive the inheritance, their heirs may inherit the debt and so on. So, you may wish to consider the implications that waiving an inheritance would have on your own children and grandchildren.

If you disclaim an inheritance in favour of another person, in some countries, such as Spain, this would be considered to be a gift and you may therefore be liable for two lots of taxation i.e. inheritance tax on your inheritance and then gift tax on it passing to another person.

Once you have officially rejected a foreign inheritance you cannot usually change your mind. So, you should be certain that you have made the right decision before disclaiming your inheritance.

Needless to say, dealing with inheritance matters in a foreign country can be complex. So, it’s crucial that you seek legal advice before deciding to whether to disclaim a foreign inheritance.

If you need advice on how to accept or reject a foreign inheritance in Spain, France, Italy, Greece or any other country, contact Worldwide Lawyers on 01244 470 339 or email us at info@worldwidelawyers.co.uk. Our friendly and knowledgeable team will be able to provide assistance and put you in touch with an English-speaking lawyer in the required country.

 

Tourism Sunset Sea Santorini Greece Oia Island

Buying property in Greece and the Greek Islands – top tips

Greece and its beautiful islands continue to be a popular choice for holiday makers and homebuyers alike, despite not being in a great economic state. In fact, the economic downturn offers those considering buying property on mainland Greece and the Greek islands – including Corfu, Zante, Kefalonia, Lefkas, Rhodes and more – a great opportunity to bag a bargain. The property market is still recovering slowly from the 2008 crash, which means property prices are at all-time low, making buying a Greek holiday home a cheaper option than many other European countries.

With the option to grab a piece of land in Crete for as little as €7,000 to build your own home, bag a renovation project in Corfu for just €40,000 or splurge on a new-build villa with communal pool for a mere €125,000 in Zante, it’s easy to see why buying property in Greece is appealing if you’re looking for your very own place in the sun.

Before getting too excited though, when buying property in Greece you should always do your research and weigh up the pros and cons before you commit to a property purchase. Here are our top tips for things to consider when buying a property in Greece or on the Greek Islands.

Buy to enjoy, not to invest!

While Greece currently offers a fantastic opportunity to buy property relatively cheaply, if you’re looking for a short-term investment opportunity to make a quick buck it may be wise to consider investing elsewhere as Greece’s housing market is uncertain. If, however, you’re looking for a place away from home to enjoy the weather, food and culture, Greece could be the perfect choice.

That said, with more than 30 million tourists per year flocking to the Greek Islands and Greece, there’s certainly money to be made renting out your property to holiday makers. Just make sure that the property is not subject to any holiday rental restrictions before committing to a property purchase if you intend to rent your property in Greece out as a holiday let.

Research the different regions 

Although, there are many reasonably priced properties in Greece there are of course areas that are more expensive. A luxury city-centre apartment in Athens or swanky pad in Mykonos is likely to set you back £1 million plus, so don’t assume that all of Greece is cheap.

Scouring the online listings is a great place to start to get a feel for what you’re after from a property purchase in Greece (and what you can afford) but nothing compares to actually visiting the property. Pictures can be deceptive and won’t show you what the surrounding area is like. If your serious about buying a property on the Greek Islands or mainland Greece schedule a property viewing trip and get organised beforehand by contacting property professionals (such as a recommended Greek lawyer and currency exchange specialist) in advance, who will be able to offer guidance while you’re out there!

Top tip: Ask the seller/estate agent for an up-to-date property inspection and when viewing a property have the inspection document to hand.

Understand your position as a foreign buyer

Foreign buyers are very welcome in Greece as the country is keen for investment from EU and non-EU property purchasers. Currently there are very few restrictions for EU residents purchasing property in Greece and on the Greek islands. It can be slightly more complicated for non-EU residents who will need to make an application to the Ministry of National Defence to prove their connection to the country and what their intentions are for the use of the property. With the deadline for Brexit set for the 29 March 2019 (with an additional transition period of two years), depending on what your budget is and whether you intend to become a permanent Greek resident it might be worth buying before the Brexit deadline. The reason for this is that under the current negotiations both sides have agreed to maintain existing residency rights. However, this could change after Brexit!

On the other hand, if you have €250,000 or more to spend you could be entitled to a Greek ‘golden visa’, giving you all the same rights as a resident of EU-member states. Greece’s ‘golden visa’ scheme is the most affordable program in Europe, however, ‘golden visas’ are only available for non-EU citizens. So, if you’re considering investing in a property in Greece and are interested in applying for a ‘golden visa’, it may be advisable to wait until the UK is no longer in the EU.

Top tip: Double check your rights regarding the property and whether there are any restrictions. Properties that are designated ‘Alpha’ by the Greek Government (a historic home) are often subject to planning constraints meaning you may not be able to make updates or changes to the property.

Seek independent legal advice

It’s crucial that you seek independent legal advice in Greece when buying a property in Greece or on the Greek Islands from a reputable qualified Greek property lawyer. You will need to be advised as to whether there are any debts attached to the property, whether building regulations have been complied with to ensure that the property is legal, whether any restrictions or advantages for foreign property purchasers apply and much more!

It’s strongly advisable that you do not instruct a Greek lawyer that is connected to the estate agent, seller or developer as this can create a conflict of interest. An independent Greek property lawyer will protect your position and interests. Don’t sign any paperwork or pay a deposit before seeking independent legal advice from a specialist property lawyer in Greece!

Top tip: Ensure that the seller has the legal right to sell the property. It may seem obvious, but your lawyer will need to ensure that the seller is in fact the genuine property owner.

Worldwide Lawyers can put you in touch with an English-speaking independent property lawyer in Greece to assist with your property purchase. Call us on 01244 470339 or email us info@worldwidelawyers.co.uk for more information. 

Don’t lose out on currency exchange

When buying property in Greece, the purchase price will be payable in Euros, so if you’re a UK buyer the chances are your money will be held in Pounds Sterling. Therefore, the funds for the property purchase will need to be converted into Euros.

Many people assume that their high street bank will handle the payment at no charge, however, while there may not be any transfer fees, high street banks do not offer a very competitive currency exchange rate. In fact, offering poor commission rates are one of the ways banks make a lot of money at the expense of their customers!

Therefore, it is highly advisable to make the transfer through a recommended currency specialist rather than transferring the funds through your bank, as they offer a much more competitive exchange rate. Typically, using a currency specialist can save around 3-5 per cent of the transfer value when compared to the banks – which could save you thousands of pounds!

Top tip:  You should ensure you use a recommended currency specialist who is authorised by the Financial Conduct Authority. 

For details of a recommended and regulated currency specialist and to discuss how they can assist you, please get in touch with Worldwide Lawyers on 01244 470339 or email us at info@worldwidelawyers.co.uk.

Do your maths

Before committing to a property purchase it’s important that you fully understand all the associated costs, so you can manage your finances accordingly. In addition to the purchase price you should budget for the following:

Estate agent fees – 1-2 per cent plus 24% VAT

In Greece it is common for the estate agent fees to be split between the buyer and the seller. Sometimes this is factored into the agreed sale price, which in effect means the buyer pays these fees.

Notary fees –  0.65-1 per cent plus 24% VAT

To complete a property purchase in Greece it must be notarised by a Greek notary public, who acts as an independent, impartial and objective advisor to all parties involved in a property purchase in Greece and ensures the legality of the contract.

Legal fees – 1-2 per cent plus 24% VAT

Lawyer’s fees are charged as a percentage of the purchase price. Greek law sets a minimum charge that your lawyer has to make for acting in a property transfer but there is no maximum.
There may be an additional cost if Power of Attorney is required and/or you need legal assistance applying for your tax number (AFM), for instance, which is mandatory when buying a property in Greece.

Transfer tax – 3.09-24 per cent

Transfer tax in Greece is charged at 3.09 per cent of the of the property value (or value of the property as calculated by the Tax Authorities, whichever is higher). However, when buying a “new build” property you pay VAT at 24 per cent instead of transfer tax. Sometimes this is included in the purchase price, when buying a new build property, so it is worth checking before making a formal offer.

Land registry fees – 0.3-0.5 per cent

Land registry fees area based on the assessed value of the property. There will also be a small additional charge for stamp duties (which is different to Stamp Duty in the UK) and certificates.

If you’re considering buying a property on mainland Greece, Worldwide Lawyers can put you in touch with reputable independent English-speaking Greek lawyers covering Athens, Thessaloniki Corfu, Zante, Kefalonia, Lefkas, Paxos, Ithaka, Kythira, Rhodes, Symi, Halki, Karpathos, Kasos, Tilos and Kastellorizo. Contact our friendly team on 01244 470339 or email info@worldwidelawyers.co.uk.

You can also download our full Buying Property in Greece Guide for more information!

 

 

Currency mailer WWL

When should you consider using a currency exchange specialist?

When dealing with overseas assets such as property, shares and banks accounts, for instance, it can be a minefield knowing where to start. Instructing a reputable foreign lawyer in the country where the assets are held will almost certainly be a necessity. However, once you’ve instructed a foreign lawyer to handle the legalities it can be tempting to assume that they will manage everything efficiently and cost-effectively, including the financial side of things. But not all lawyers are clued up on the impact of currency exchange, especially if they do not regularly deal with international matters.

If you are handling any of the following transactions for yourself or as a lawyer acting on a client’s behalf, using a currency exchange provider can save you or your client thousands of pounds:

  • Buying a property overseas
  • Selling property overseas
  • Inheritance of foreign assets
  • Debt recovery where assets are located overseas
  • Acquisition of a foreign company
  • Making regular payments to a foreign account

Why is this? Because when it comes to transferring money between countries that use different currencies, the funds must be converted from one currency to the other. However, how to get the best exchange rate and the impact of currency exchange fluctuations are issues which are often not properly considered, which can inadvertently and unnecessarily cost several thousands of pounds.

The most cost-effective way to transfer funds between countries and currencies is to use a currency exchange specialist (also known as a currency broker, foreign exchange or Forex) rather than transferring the funds through the high street banks. This is because the bank’s exchange rates tend to be very uncompetitive and may also be accompanied by commission charges just to transfer the money overseas. Currency specialists, however, typically offer currency exchange rates that are 3-5 per cent better than high street banks meaning 3-5 per cent more of the funds will be preserved. For example, if you need to transfer the equivalent of £100,000, transferring the funds directly into your bank account and allowing the bank to convert the currency could cost up to £5000 more!

So, how do currency exchange companies save you money?

The reason that currency specialist companies are able to provide much better exchange rates than the banks is due to the volume of foreign currency transfers they make and the fact their sole aim as a business is to offer much better exchange rates compared to the banks. The currency markets change second by second but the banks often set their exchange rates at the start of the day. This means that banks have to build in a lot of ‘fat’ in to the rates offered to their customers to provide a large profit margin to cover them in case of adverse currency exchange fluctuations throughout the day. Currency brokers, however, offer exchange rates which are updated every second so they do not have to build in these high profit margins, unlike the banks, and can offer much more competitive rates.

Currency specialists can also advise you about the timing of the currency transfer and ‘fix’ rates to help you ensure the maximum amount of funds are received.  Using a recommended foreign exchange specialist is not only cost effective but also very time efficient. You can set up an account and send a payment within minutes. It is simply a case of transferring funds to a separate account where the money can be exchanged, and the relevant currency forwarded on to the desired account.

It is however recommended to contact a currency specialist as soon as you know you will need to make or receive an overseas payment as a good currency specialist will also be able to advise you regarding the timing of the transfer to help you get the most from your money. A good currency specialist will also be happy just to give you some information about how they can help.

The service provided by currency exchange specialists are usually free but can save a significant amount! 

 

Example 1 – repatriating foreign funds from an estate with overseas assets 

You are dealing with an estate where there are shares in a German company worth €200,000. You are based in the UK and need to receive the funds into your (or your UK client’s account). You will therefore need to convert your €200,000 into Pounds Sterling.

High Street Bank Rate Currency Specialist Rate
€200,000 @ £1.15 €200,000 @ £1.12
Amount received in £ £173,913.04 £178,571.43

By using a currency specialist instead of a bank, you or your client would have received £4,658.39* more!

It is recommended that anyone repatriating foreign assets or arranging to transfer money to or from abroad, contacts a currency specialist rather than risk leaving the transfer to the bank. A good currency specialist will be happy to give you some no-obligation information about the best way to deal with the currency exchange and how they can help you save money.

 

Example 2 – transferring funds for a property sale in Spain 

You or your client is selling a property in Spain for €150,000 but the funds will be received in Euros and you/they want to transfer the funds back to the UK, so the €150,000 will need to be converted into Pounds Sterling first.

High Street Bank Rate Currency Specialist Rate
€150,000 @ £1.15 €150,000 @ £1.12
Amount received in £ £130,434.78 £133,928.57

By using a bank instead of a currency specialist, you or your client would have lost £3,494.79* from the property purchase price.

 

Example 3 – buying a business in Australia 

You or your client based in the UK is buying a business in Australia valued at $1,000,000 AUD. The funds for the business purchase are held in Pounds Sterling but will need to be converted into Australian dollars before completing the acquisition.

High Street Bank Rate Currency Specialist Rate
$1,000,000 @ £0.59 $1,000,000 @ £0.57
Total cost in £ £590,000 £570,000

By using a currency specialist rather than transferring funds for the business acquisition it would save you or your client £20,000*.

*Exchange rates are subject to change.

As set out in the examples above, a small amount of research and planning can make a vast difference to the amount of money actually received and can add a considerable amount of value.

Currency exchange specialists help individuals, businesses and law firms save money on their overseas money transfers. As a lawyer, by helping your clients send or receive payments in the most cost-effective way, you can often save them more than the cost of your fees, adding real additional value for your clients!

 

For details of a recommended currency exchange specialist and to discuss how they can assist you and your clients, please get in touch with Worldwide Lawyers on 01244 470339 or email us at info@worldwidelawyers.co.uk 

All Currency Exchange Specialists recommended by Worldwide Lawyers are registered and authorised by the Financial Conduct Authority as well as fully regulated by HMRC and protected by the Financial Services Compensation Scheme.

Worldwide Lawyers can also assist should you require details of a recommended foreign lawyer to assist you in dealing with legal aspects of your international matter. 

 

 

affidavit of foreign law probate

Need an affidavit from a foreign lawyer?

If a person who is domiciled outside of the UK dies owning assets in the UK, the probate registry will usually ask for an affidavit of foreign law (also know as declaration of heirs or certificate of heirs) before issuing the Grant of Probate/ Grant of Letters of administration to the executors or administrators of the estate.

What is an affidavit of foreign law?

An affidavit of foreign law (also known as an affidavit of law or evidence of law) is a sworn statement clarifying the inheritance laws of the country where the deceased was domiciled. It must prepared by a suitably qualified/ experienced lawyer familiar with the laws of the country where the deceased was domiciled or by a notary practicing in the country of the deceased’s domicile.

The affidavit of law should set the relevant inheritance law of the place of domicile in relation to the succession/ distribution of the assets, and who is entitled to apply for the Grant of Representation. 

Why is an affidavit of foreign law required?

An affidavit of foreign law is usually required in order to obtain a Grant of Probate or Grant of Letters of Administration (collectively known as a Grant of Representation) where the deceased died domiciled outside of the country where the probate application is being made.

The Probate Registry requires the affidavit of foreign law so that they can ensure that they will issue the Grant of Representation to the person entitled under the relevant laws.

An affidavit of law will not usually be required where it is possible to re-seal a Grant of Representation that has already been issued by another country.

How do I get an affidavit of law?

If you are a lawyer or personal representative of an estate where an affidavit of law is required from a foreign lawyer for an application for a grant of probate or letters of administration whether in the UK or elsewhere, Worldwide Lawyers can help.

We can put you in touch with a suitably-qualified English-speaking foreign lawyer who can provide an affidavit of law to support a probate application.

Contact us on (+44) (0)1244 470339 or at info@worldwidelawyers.co.uk for more information and to get a quote.

We can assist with affidavits of foreign law for England, Scotland, Spain, France, Turkey, Portugal, Italy, Switzerland, Hungary, Belgium, Greece and more..