QWSpanish Assets wills_book-v1.26,31C07

Quill Wills | Spanish Asset Wills for English Speaking People

Spanish Asset Wills for English Speaking People

The Willwriters Association The Association of Lawyers © Quill Wills in Spain v1.26,31C07

A Quill Group Company

Part Three: Relevant Law

Price £4/6€

Lanzarote edition

page 2 © Quill Wills in Spain v1.26,31C07

The Spanish Language VersionSpanish Asset Wills for English Speaking People is available in Spanish - in the event that you - an English speaking person - may wish to co-ordinate your Willwriting actions with other issues - involving Spanish advisors – or simply to help Spanish advisors to properly understand why a Spanglish or Spanish Will is unlikely to be appropriate to your needs.

To obtain a copy(ies) of the Spanish edition please contact the Quill Wills office.

Tel: 0034 928 346 544 [Spain]Tel: 0044 (0)1745 815094 [UK]

Email: [email protected]

page 3© Quill Wills in Spain v1.26,31C07

Four key factors........................................................................................................................................... 4

The Spanish law of Succession .................................................................................................................... 6

The Spanish Succession Tax ..................................................................................................................... 10

Wills for UK Citizens with property in Spain ........................................................................................... 12

A Spanish Assets Will for an English Speaking Person ............................................................................ 14

Spanglish Wills .......................................................................................................................................... 16

€176,400 reasons not to write a Spanish - or Spanglish - or Spanglish - Will ....................................... 18

Double taxation ........................................................................................................................................ 21

The Spanish Tax escape hatch .................................................................................................................. 22

After you have gone .................................................................................................................................. 24

A dual system Will .................................................................................................................................... 30

Conclusions ............................................................................................................................................... 31

Sunday Times article ................................................................................................................................. 32

Uninformed local lawyers can cause serious financial damage ............................................................... 34

The Rules of LAWDO ............................................................................................................................... 41

Adams vs. Adams ...................................................................................................................................... 42

Denny vs. Denny ....................................................................................................................................... 44

Convention of the Hague 1961.................................................................................................................. 46

Article 9 of the Spanish Civil Code ............................................................................................................ 48

UK-Spain Double Taxation Agreement .................................................................................................... 50

Why would you? ........................................................................................................................................ 52

Index



1. A Separate Will

As a ‘foreigner’ with assets in two locations you should make a separate ‘Spanish assets Will’ disposing of your Spanish based property.

This avoids time-consuming and expensive legal problems for your heirs.

This Spanish assets Will should sit alongside separate will(s) disposing of your other assets - that are located outside of Spain.

Specifically your homeland will must not deal with your assets in Spain - and your Spanish assets will must not deal with your homeland assets.

In connection with Spanish, or Spanish based asset wills there are four fundamental points that must reach the attention of ‘foreigners’ of all nationalities with assets situated in Spain. The ‘key points’ are made on this pages, and in the greater detail that follows:


Four key factors about Spanish Assets Wills for English Speaking People

2. Spanish Rules

Providing there is a will - in the correct form -that deals specifically with your Spanish assets the Spanish authorities will not make you, a foreigner, follow the Spanish law of compulsory heirs (in which you must leave two thirds of your estate to your children).

As long as your own national law permits it - and you have a will that would be valid and lawful in your homeland, you are able to leave your estate to anyone you choose.

This, though, does not necessarily mean you writing a Spanish Law Will that is notarised.

Whilst such a will might be appropriate to your needs it is likely not to be, and can, in some situations, lead to a disaster.

From this book you will learn that you have a choice of making a ‘local’ - but potentially unsafe will - or - a ‘homeland’ safe - but potentially slow - performing will - or - you could write a ‘dual system’ will - that is both ‘fast’ and ‘safe’ - but - more expensive.


4. Elimination of Taxes

If you are an official resident of Spain, leaving your property to a spouse or child who is also a resident, you may be eligible for a 95% reduction in the value of the property for inheritance tax calculations - albeit for the first €120,000 (only)

This is not available to non-residents.

The specific ‘rules’ for each of the regions of Spain are available from Quill on request.

With the exception of this reduction - Spanish law provides no large exemption from inheritance tax.

Whereas in most English speaking countries when the family home is transferred or between spouses a substantial tax exemption is allowed, in Spain tax is due after the first €16,000 of the value of the estate.

As a resident, or non-resident, you can - however - arrange for the legitimate elimination of inheritance tax (and several other taxes) by way of a Quill ‘Patrimonio Familiar’ family shelter structure.

You should take the time to understand these structures described in this book before buying property in Spain.


3. Spanish Tax

Your estate in Spain, will be subject to (potentially very high) Spanish inheritance taxes and especially so when property is left to distant relatives or strangers.

There are very few legal ‘ways around’ - i.e. of avoiding Spanish inheritance taxes.

From this book however you will find that an ‘escape hatch’ is possible - IF you approach your purchase of property assets - or ownership of property assets - in Spain - in a more structured and intelligent way.

It is likely that if you took advice from international legal and accounting advisors (i.e. those with expertise and a foot in both countries) before you and your money came to Spain that you may not require a Spanish Assets Will at all - or only as a ‘drip tray’ to deal with ‘odds and ends’ that fall outside of your ‘structure in Spain’.



The Spanish Law of Succession

In order to protect the family and provide for children, Spanish internal inheritance laws restrict the testator’s freedom to leave his property or estate to anyone he pleases.

It is almost impossible for a Spanish parent to make the classic English threat “behave or you’ll be cut out of the Will!”

This is because Spanish law requires a parent to leave two thirds of his estate to his children, even by-passing the surviving spouse.

Some foreigners wish to provide only for their children - so have no problem in making and notarising a Spanish law Will in accordance with those provisions - shown in the panel below.

Most however have quite different needs.

Spanish Law Wills for English speaking foreigners - are - typically - made out in two columns.

One column is in Spanish and one in English (or a language the testator prefers).

A husband a wife must each make a separate Will as they each own property separately.

The Will is then checked by the notario and signed in his presence and that of three witnesses.

This is called a testamento abierto, an open Will, which is the most standard.

The notary keeps the original in his files, gives the testator an authorised copy and sends a notification to the central registry in Madrid, called the Registro Central de Ultima Voluntad.

The ‘protocol’ numbers of all Spanish Wills are kept on file there to ensure that a legal copy can always be found.

If the Will is lost, or if you do not know whether the deceased person has made a Spanish Will (or not), you can apply to the central registry for a positive or negative certificate as to whether a Will exists under that name.

If it does exist the registry will give you the ‘protocol’ number and the name of the notary who made it in the first place and you can get a copy of the Will from that notary.

Defining the Estate

Under Spanish law, a surviving spouse keeps all of his or her assets acquired before the marriage, plus half of all the goods acquired during marriage and all personal or inherited gifts that have come directly to this spouse.

Assuming that most of the couple’s assets were acquired during their marriage, this means that about half of their joint personal (or moveable) assets do not really form part of the deceased person’s estate. The value of the estate is then its ‘true value’ on the day of death, increased arbitrarily by 3%, added to the declared value of the fixed property.

As a result of the above - half of the immoveable property assets continue to belong to the surviving spouse and, of the rest of the assets, only one third can be freely disposed of under the Spanish law of herederos forzosos, or obligatory heirs.



Children as compulsory heirs

When a person dies leaving children and a will, the estate is divided into three equal parts:

i. One third must be left to the children in equal parts.

ii. Another third must also be left to the children although the testator may decide how to divide it (he can choose, for example, to leave all of this third to only one of his children or grandchildren etc.)

The surviving spouse has a life interest in this third. If the estate is a house or a piece of property the child who inherits it cannot dispose of it freely until his surviving parent dies - because the surviving parent holds an usufruct or usofructo over the property.

iii. The final third of the estate can be freely willed to anyone the testator chooses.

Foreigners in Spain

The Spanish law of obligatory heirs applies to foreigners with property in Spain restricting the disposal of this property, just as it restricts such disposal for Spaniards.

This is because most nations, including Spain and the UK and Ireland apply ‘the law of the place where the property is located’.

Despite this Article 9 of the Spanish Civil Code - reflecting Spain’s adopotion (on 5th January 1964) of the Convention of the Hague of 5th October 1961 allows that - when a foreign property owner dies (even if he holds an official residence permit or is a tax resident) the disposition of any assets he has in Spain will be governed by his own national law - not Spanish law.

Freedom of disposition however can apply only when (1) the testators national law allows it and (2) if the foreigner has an existing Will that can be certified as being valid.

Thus - if - his own country’s law permits free disposal of the estate - then - the existence of a Will that is valid under the rules in that country frees him from the Spanish law of ‘compulsory heirs’ explained above.

English law, Eire law and US law provide free disposition of assets.

German law and Scottish law require that some portion of the estate go to surviving children.

All this does not free the foreigner from Spanish inheritance taxes.

The law in Spain states that any foreigner officially resident in Spain is subject to Spanish gift and succession tax law on his worldwide estate.

Non tax residents of Spain are subject to these taxes only on their immoveable (i.e. property) assets in Spain.



Processing a foreign WillFor a foreigner’s ‘Spanish Assets’ Will a set process must take place - in order to dispose of assets in Spain:

a. A grant of probate is obtained in the homeland in the normal way of that country.

b. A notary, in the homeland country, prepares a certificate of law (‘certificado de ley’) in a standard format that affirms

The testator had the legal capacity to make the (Spanish Assets) Will under the law of that country.

That the Will is valid.

That the Spanish law of obligatory heirs and the dispositions relating to property of spouses do not exist in the law of your country.

That the Will has been duly proved.

That the executors of the trustees have the correct legal powers to administer the estate.

c. The certified copy of that grant of probate (a) is legalised by the Spanish Consul in your home country

d. A Spanish translation of this certified copy is then prepared by an official Spanish translator.

e. The British/Eire law ‘Spanish assets’ Will can now be declared effective - to dispose of the assets in Spain

f. A Spanish Abogado (lawyer) is empowered to prepare a list of the assets in Spain, see that the Spanish inheritance taxes are paid, and handle the rest of the paperwork involved in distributing the assets.

g. This process need take no more than a few weeks, nor need cost - even for a complex estate situated in Spain - more than £3,000/4,000€ which is little different from the ‘normal’ situation in the UK or Spain.

It is more fully described (on page 22) in the chapter ‘After you have gone’.

A ‘dual system’ willIt is possible to take all of the (often crucial)

advantages of a ‘homeland’ will - and still enjoy the ‘simple’ benefits of having a will in the Spanish system - by way of a ‘dual system’ will - described (page 28) in the Chapter of that name.

Foreigners Intestate in Spain

If any foreigner with property in Spain dies intestate - without having made a valid Will - THEN Spanish law will be applied to his assets in Spain and they will be divided equally among his children (see panel).

Dying in Spain without leaving a Will

When a husband in Spain dies without a Will (leaving a widow and three children, for example) and the only property is the house, the widow continues to own her half of the house.

The other half of the house constitutes ‘the estate’ that is divided equally among the three children.

When the estate is settled, each child will have one third title to half of the house, meaning that each one now owns one sixth of the house. The title deed, thus, - now - has four names on it - the widow and each of the three children.

The widow holds a usufruct on the children’s share and can use their half of the property until she dies, as well as her own half.

If the house is to be sold - or mortgaged - they must all agree, and sign the deed - which greatly restricts the widow’s options.

If this situation suits your circumstances you do not require a Spanish Will, or a Quill Spanish Assets Will at all - and need not mention your Spanish property in your homeland Will - UNLESS you wish to protect yourselves from your homeland and/or Spanish ‘succession’ taxes - see below.

Article 9 of the Spanish Civil Code that deals specifically with foreigners



Spanish, Spanglish and (foreign) Spanish Asset Wills

A traditional (100€) Spanish Will looks like this:

A (300€ - 600€) Spanglish Will - written in Spain - and notarised - for a foreigner - looks like this:

A simple Spanish Assets Will - written by a foreigner - under Spanish law - looks like this:

A comprehensive Spanish Assets Will - written by a foreigner - under Spanish law - looks like this:



often comes as a complete surprise to English speaking, foreign property owners (though it is normal throughout mainland Europe).

This tax is charged even when the inheritance is between spouses, with only a minimum exemption.

Spain’s Ley de Sucesiones provides no large exemption from Spain’s inheritance taxes when property is passed to a spouse or to family members.

The present law provides a total exemption from taxes only for legacies under €16,000.

The exemption seems rather small - but - it applies to each inheritor - not to the total estate as the UK exemption does.

If you have a property worth €300,000, your half equals an estate valued at €150,000 - and if you leave it equally divided among your spouse and three children each will receive tax free inheritance

Spanish Succession Tax

worth €16,000 and the bequest will attract tax only on the balance - of €84,000 of (circa) €10,000.

An inheritor under the age of 21 has an exemption of up to €48,000. For each year younger than the age 21 he deducts an additional €4,000. This is up to a maximum deduction of €16,000 at the age of 13.

This exemption applies to bequests between parents, children, spouses and brothers and sisters.

The blood penaltyFor uncles, cousins and nephews, the standard exemption is cut by half to €8,000 and the due tax is multiplied by 1.5.

For more distant relatives, or those not related at all (i.e. partners or so called common law marriages) there is no exemption and the due tax is multiplied by 2.0.

JOINT ASSETS ON FIRST DEATH - PLUS - ON SECOND DEATH

€150,000 €6,128 €15,336

€200,000 €9,838 €24,859

€300,000 €18.278 €47,329

€400,000 €21,250 €72,829

€500,000 €38,875 €101,275

€800,000 €76,898 €190,525

€1,000,000 €106,022 €257,272

€2,000,000 €262,697 €597,272

To be exact, the exemption is €15,956.87. This odd figure results from the addition of yearly inflation to an original round number - plus the conversion from pesetas into euros. We refer to it as €16,000.





Wills for UK Citizens with property in SpainFor citizens of the UK several complications arise out of the combination of UK law and Spanish law.

Under UK law (the Wills Act 1963 (1) like that of most countries, states that the disposition of ‘real’ property such as land, houses and apartments will be governed by the law of the country where the property is located.

This applies to Wales and Northern Ireland - but not to Scotland. Also (2) that other assets, such as investments, will be governed by the law of the country where the deceased is legally domiciled at the time of his death (which should be assumed by anyone with a British passport to mean the UK).

For someone not to be deemed ‘domiciled in the UK’ who originates from the UK (and who has a UK passport) a tax authority certificate of release is required.

Article 9 of the Spanish Civil Code (3) nevertheless provides that when a foreign property owner dies (even if he holds an official residence permit or is a tax resident of Spain) the disposition of any assets he has in Spain can be governed by his own national law - not Spanish law.

This can sound like a contradiction, but it is not.

It follows the adoption by Spain - on 5th January 1964 - of the principals of the Convention of the Hague of 5th October 1961.

Care must be taken to understand the position, which - in this situation is:

The law of Spain rules that sovereignty in law governing an individual’s assets following death always belongs, in the first instance, to their homeland country.

Therefore it is FIRSTLY the national law of the UK that applies to the immoveable assets of its citizens who die in Spain, governing 1 and 2 above.

BUT - UK law and Spanish law (as well as that of most countries) THEN rules that - ‘fixed assets’ abroad are governed by the law of the jurisdiction where they are situated.

‘Moveable assets’ however remain governed by the law of the country where the deceased is domiciled’.

Domicile is a complex concept. It starts with the nationality of your father, and ‘moves on’ according to subsequent events.

This generally results in the fixed property assets in Spain of a UK citizen falling under the law of Spain meaning herederos forzosos - or obligatory heirs - whilst moveable assets, such as bank accounts or insurance policies fall under UK laws of disposition.

Article 9 of The Civil Code of Spain though THEN provides that where there is a Will that is valid in his or her homeland - and can be certified as such - the disposition (disposal) of the assets in Spain of a foreigner will be governed by the national law of his or her homeland - and not the law of Spain.

This does not take the position back to the beginning(1) again because there are rules - set by all countries - called Renvoi to avoid that. It however raises a special question as to whether a Will exists dealing with the property in Spain - and if so - is it legally binding and valid in the homeland country?

If the deceased is from the UK and has left an un-notarised - or notarised - UK Will (that is valid and legally binding) specifically applying to the Spanish property - then - those wishes will apply - even if those same wishes would not be legal for a Spanish citizen.



A Briton who owns property in Spain can thus bequeath his Spanish apartment in the same Wills Act 1837 British Will he uses to dispose of his property in England - and his Will can be accepted in Spain.

Preferably he can write two British Wills, one for Spain and one for Britain, though expert care must be taken with that for Spain (see panel on the right).

If someone has lived in Spain for a long time it may be necessary to re-create a legal domicile in his home country as part of this Will (or separately).

This (i.e. Quill Wills) approach was fully tested in the Adams v Adams case in the High Court in 1985 and that ruling has never been challenged - it remains the definitive position in the eyes of the UK and Spain.

If the deceased foreigner leaves a notarised Spanish law Will - under Spain’s rules of obligatory distribution - then Spain will follow that in exactly the same way as for a Spanish national - with two thirds going to the children.

If the deceased foreigner leaves NO WILL then Spain will apply its rules of intestacy for all immoveable property in exactly the same way as for a Spanish national - and NOT the rules of the deceased’s homeland.

In the midst of all this there might arise a ‘Spanglish’ Will written by Spanish lawyers or fiscals as if under Spanish law i.e. but with dispositions as if it were a UK Will.

Spanglish Wills might (though it is not guaranteed) provide the required disposition - but - they do nothing whatever to secure the UK tax exemptions the testator’s family is entitled to. (Pages 14 to 19).

The LAWDO diagram on page 32 & 33 will help you to follow all this.

Wills Act 18371837 c.26 7 Will 4 and 1 Vict

Wills Act 19631963 c.44

JUDGEMENTS RULE – OK ?ADAMS VS ADAMS (widow)

Children thwarted - by her husbands UK law Will - from stripping widow of

what her husband had left her.A ‘landmark’ hearing before the UK High Court – in July 1985 – concerning the (Quill style Will – i.e.) UK law – ‘Spanish Assets’ Will of Christopher William Adams - was set in stone manner in which English speaking people – with assets in Spain should write their Will – as regards those Spanish assets.

It is based upon this judgement – that has since been ratified in the Spanish supreme court – that Quill Wills – and all other experts in this field - advise English speaking people NOT to write a notarised Spanish law – or SPANGLISH Will.

A SPANGLISH WILL CAN BE OVERTURNED (as happened in Denny vs Denny (widow) – AND – is highly tax inefficient.

English speaking people should ONLY write a Quill style Will of their own nationality.

Christopher Adams – who was domiciled in the UK – and of British nationality – died on 3 April 1982 - leaving a UK law Spanish assets ‘i.e. Quill’ Will.

In that Will he left all his property in Spain to his wife (widow) Beryl Doreen Adams – in the way that 95% of all Quill Wills testators want to do.

Christopher Adams was survived by a wife - and son.

The son – Harold Christopher Adams – however challenged his Will - on the basis that under Spanish law he (the son) was entitled to two thirds of the estate.

Certainly – under Spanish internal law this would have been the case – BUT for article 9.8 of the Spanish civil code – which reads :

‘… Succession by reason of death shall be governed by the national law of the decjus at the time of death, irrespective of the nature of the assets…’.

There is no dispute – the judge Sir Nicholas Christopher Henry Browne Wilkinson – decided – that under article 9.8 of the Spanish civil code succession … Succession falls to be determined by English law.

Therefore the ‘Quill’ style Will stood - and was judged to be binding and valid. The son thereby LOST his claim.

That position – in respect of a Quill Will has remained ever since – AND – has been ratified by the Spanish supreme court.

WHY THEN – one is bound to ask do some abogados in Spain want to persuade any English speaking person to write a notarised Spanish Law SPANGLISH Will ? (other perhaps than for the fees they can earn?)



A Spanish Assets Will for an English speaking personTaking account of recent High (UK) and Supreme (Spain) judgements and rulings it is clear that to be beyond doubt - a Spanish Asset Will for a English speaking person should be written under the law of their homeland – and be valid in their homeland – BUT – carefully constructed so as be suitable for use in / by Spain.

The most important aspect of this is that the Spanish Asset Will should only cover assets situated in Spain (and any other Wills that sit alongside it should specifically not deal with any assets in Spain).

A Spanish Asset Will should also deal with events that might occur in Spain such as the repatriation of under age children to homeland (UK / Eire) guardians - and funeral arrangements if death does occur in Spain.

It is a good idea for the Will to contain details of a Spanish Abogado in the relevant location - capable of handling matters in Spain on behalf of - or in conjunction with a homeland Executor or Solicitor.

Quill also considers it to be good practice to identify a UK notary who is familiar with the process detailed on page 5 (Processing a foreign will) as the suggested notary and preferably with the Spanish language.

A Spanish Asset Will should make it quite clear that the testator still considers himself or herself domiciled in the UK / Eire.

Being in mind that a grant of probate will be obtained in the English language - that reflect the content of the Will - that ‘grant’ must be capable of being translated into lucid Spanish - in order that the instructions contained in them can easily be followed by a Spanish Abogado - it is crucial to use simple and plain English in the will – that is capable of literal translation, free of as much English ‘legalese’ as possible.


Care is needed with dual homeland and Spanglish Wills

There is a widely reported case that illustrates the care that must be taken with dual Wills.

In this particular instance a person made one Will in Spain stating that all assets there were left to one inheritor and another Will later in Germany, leaving ‘everything’ to a different person.

The testator seemingly intended to leave all her German assets to family members and her Spanish villa to the friend who had looked after her for years. But she had first made a Spanish Will leaving the villa to her friend in Spain and then made a German Will, dated after the Spanish Will, leaving ‘everything’ to her German family members.

The German family inheritors later had the German Will translated into Spanish and legalised and took possession of the Spanish property as well. They were able to do this because the German Will made no distinction of country and was dated after the Spanish Will and so took precedence.

The testator’s wishes were not carried out and the faithful friend who had looked after the ill and dying person in Spain did not inherit the villa.

If you do have a Spanish law Will - or Spanglish Will then you also need to make a foreign Will disposing of any assets you have in other countries - which must state clearly that it disposes only of your assets in that country.

Your Spanish Will must state that it disposes only of your assets in Spain.

It is best if both Wills for Eire / the UK assets and those for Spain assets can be prepared by the same professional advisor (such as Quill Wills) who are able to co-ordinate both Wills ensuring they are complimentary and not conflicting.


The Spanish Assets Will need not be free of trusts - though trusts are not recognised in Spain - but for the same reasons, such trusts that do exist should be worded simply.

As soon as a Spanish Asset Will exists – (or any other Will that sits alongside another – i.e. homeland Will – a very dangerous potential exists for an accidental conflict of instructions - or worse, the accidental revocation of one Will by the other.

A Spanish Asset Will should be perfectly clear in stating that whilst it does revoke previous Spanish Asset Wills it does not revoke any other Will - and that it covers only assets situated in Spain and specifically does not cover any assets not in Spain.

It is because of all of these complexities that most families consider the wisest move to be to have a single International Willwriting organisation (like Quill !) write all - two or three - or sometimes more - of the Wills necessary to deal with their worldwide estate - in order that one single Will drafter can co-ordinate the jigsaw of multiple Wills.



There is a practice by which any foreigner can make a Spanish Will in Spain with a local lawyer or fiscal and have it notarised and can bequeath his Spanish property to any person of his choice - so long as his own national law is ruled by the principle of free disposition of property by testament.

The Spanish registrar of Wills accepts this and, when the time comes (assuming no problems arise), the Will is executed and the inheritor takes possession.

Spanish lawyers have in the past routinely made such Wills referred to in the case of English speaking foreigners as ‘SPANGLISH’ Wills.

If you are British, you could make a Spanglish Will - leaving your Spanish property to whomever you choose - BUT - two matters now make this a questionable path to follow.

Legitimate Inheritors can contest a ‘Spanglish’ Will

All of the above - which relates to a foreigner making a Spanish Will but avoiding Spanish inheritance law (which requires him to leave at least two thirds of his estate to his children - that

permits him to leave his Spanish property to anyone he chooses) can work - BUT - such a Will is not in agreement with the law of Spain as written - and relies upon a Spanish Judge not acting upon Spain’s own internal laws.

Most professional advisors (including Quill) feel that their ‘last Will’ is not something to take a gamble upon and that this is not a real solution to their needs.

If, for example, you write your Spanglish Will leaving your villa to your daughter and cutting out your errant son, that son - with Spanish legal advice - can easily contest the Spanglish Will on the grounds that the law in Spain - which is the relevant law - stipulates that half of the inheritance is his. He cannot - in theory - fail to win his case in any Lower Court in Spain - and title to half of the villa.

This is exactly what occured in Denny v Denny, when the testators children by his first marriage successfully ‘overturned’ their father’s Spanglish will leaving everything to his second wife. His wife was stripped of two thirds of what she had been left in the Spanglish will.

Fortunately she was wealthy in her own right and prepared to spend nine years and 100,000€ fighting to have that judgement overturned.

If there could be any possible challenge from one of Spain’s legitimate inheritors, such as a child, you should not write a Spanglish Will.

If no possibility exists of anyone successfully contesting your Will, then you could write a Spanglish Will - BUT - you should also consider the serious tax failings, and implications of a Spanglish Will.

Spanglish Wills and UK/Eire Tax

A major problem created by Spanglish Wills is that they are likely - in fact are almost certain - to INCREASE the amount of homeland inheritance tax you will pay.

You will almost certainly pay inheritance tax to

Spanglish Wills



your homeland government on your worldwide estate for as long as you have a UK / Eire etc passport.

In English speaking countries there is no tax on first death between spouses or joint house owners and everyone can give away a substantial sum before tax.

This tax free amount is £285,000 in the UK or up to €478,115 in Eire.

This however can only work to its maximum when Wills are written in the correct terms including what are called ‘NIL BAND TRUST’ arrangements.

If this does not happen then a couple are not jointly able to give their beneficiaries - UK £570,000 or Eire €956,230 at the nil band of tax.

Instead ONLY a single UK £285,000 /Eire €478,115 can be given away tax free - with tax being paid at UK 40% / Eire 20% above that.

Not having Nil Band Trust arrangements included in their Will costs beneficiaries in the UK £114,000, and in Eire €95,623.

Nil Band Trust arrangements are IMPOSSIBLE in a ‘Spanglish’ or Spanish law Will, which may affect your family greatly.

The existence of Spanish gift and succession tax

JUDGEMENTS RULE – OK ?DENNY VS DENNY (widow)

Widow stripped by Spanish court of two thirds of her husband’s bequest to her.

In this 1995 hearing before the Spanish court in Jerez de los Caballeros, the three children from the first marriage of John Anthony Denny – who was of British nationality but living for many years in Spain – challenged their father’s SPANGLISH Will.

This is a Will of the exact same type that - in their advertorial in the Gazette - Abogados from ASG and IDL calling themselves ‘The Lanzarote Law Society’ advise English speaking people in Spain to have written - by them.

John Denny died at Salvatierra de los Barros on 30 April 1990, leaving a nuncapative (Spanglish) Will made on 23 November 1987.

That Will made three years before his death gave all of his assets – titles and stocks to his, then (i.e. second) wife Celia Denny – in exactly the way – that (almost) every english speaking person wants to do.

His assets included their home – purchased during this marriage - to Celia.

The childrens barrister D. Alejarido Perez Montes Gil Stated to the court that the succession of John Denny – despite the terms of the Spanglish Will and its notarisation – must be governed by Spanish law – and that therefore the three children have the capacity of legitimate heirs competing with the surviving spouse.

After examining the evidence relating to the internal law of Spain – the judge declared that the succession consequent of the death of John Denny is governed by Spanish law - and - therefore that the children of the deceased were entitled to two thirds of the widows property that had been willed to her. The previous transfer to the widow was revoked leaving her with only one third of the property of her late husband – even though that had been purchased during the period of her marriage to her husband.

The spouses deed of title obtained by her on 22 October 1990 was consequently null and void.

Mrs Celia Denny, lost two thirds of her inheritance of her late husband in a court hearing in Spain – in Spanish.

Had this been a hearing in a UK court in English – as is always the case with a Quill Will – she would have ‘won’ – just as widow Adam had – before her in 1985 - setting a precedent that still stands.

Fortunately widow Denny was determined, patient and wealthy (and survived for several years after her husbands death). She did eventually succeed in obtaining a judgment giving her property back by reference to the Adams precedent.

QUILL WRITES NON NOTARISED SPANISH ASSET WILLS FOR ENGLISH SPEAKING PEOPLE – because we cannot recommend that other clients place their families in a position to have to argue matters in a Spanish court in a language not their own – when a UK law Spanish Assets Will is guaranteed (by Adams vs Adams (widow) to be unassailable).

WHY THEN – one is bound to ask - do ASG or IDL go out of their way to persuade any English speaking person to write a notarised SPANGLISH Will?


This is the story of a man and woman living in the UK - jointly owning a £600,000 house.

Each also had £150,000 of UK life insurance written in trust to the other.

Their UK tax position - at that time - in the event of their deaths was:

1. All gifts between them - as husband and wife were UK inheritance tax free

2. Also that bequests (gifts) up to a total of £285,000 - called the nil band - made to any other party were UK inheritance tax free.

3. Above this all gifts would be UK taxed at 40%.

4. Further - their £150,000 of (family income benefit) ‘life insurance’ providing the survivor with an income of £15,000 per year for 10 years would be tax free to the beneficiary.

The ‘Nil band’ mechanismA UK ‘tax efficient’ Will operates by giving ‘the nil band amount’ - in this case £285,000 - to a ‘nil band trust’ - for the ultimate benefit of the children (or whoever).

Until his/her death however the fund (its cash or assets) are controlled exclusively by - and available for the use of - the surviving spouse.

This ‘nil band’ trust fund is likely to include half, or a percentage of, the family home.

Any residue (or surplus) of the estate of the first to die - after the nil band amount (in this case of £15,000) passes to the spouse – tax free.

If their deaths had occurred before they moved to Spain - then - £285,000 - in the shape of an interest in the family home would go to the nil band trust – to be controlled by the surviving spouse for the rest of her life

The surplus estate of £15,000 would pass tax free to the widow.

The widow would also receive a tax free insurance income of £15,000 per annum for ten years.

The ‘Nil band’ TrustUntil his / her death the spouse is trustee – and has lifetime use of the trust.

The children (or whoever the testator wishes) are the ultimate beneficiaries of the trust – following the death of the surviving spouse - free of tax.


€176,400 of reasons why to write a Quill Wills, ‘Spanish Assets’ Will387,840 arguments for a Quill Assets Shelter

If you have a Spanglish will you may not be able to rely upon it - but you might frame it!

176,400 reasons not to write a Spanglish - or Spanish -Will



On her - the survivors (second) death in the UK - after (say) 10 years 1. The £285,000 ‘nil band’ trust - from their

father Will - passes to the children tax free (other than tax payable upon any increase in its value since its settlement).

2. Her half of the estate - of £285,000 - passes to the children - tax free - along with

3. The surplus above that of £30,000 - taxed at 40% (£12,000 tax) leaving them with an additional £18,000.

Summary The children therefore receive £285,000 tax free from their mother - plus £285,000 tax free from the trust - plus the £18,000 after tax surplus of the estate’s value above £570,000 - plus the £150,000 tax free life insurance on their mother’s life – as an income - over 10 years.

In total the children share £750,000 (€1,050,000).

Off to Spain But - in fact - the parents ‘sell up’ in the UK and move to Spain) with £600,000 - or €840,000 capital (where they ultimately die).

They buy a €600,000 house and deposit €240,000 in La Caxia bank.

They go to Arrecife to write new - ‘Spanglish’ - Wills - with a Spanish lawyer (who advises them against a Quill Spanish Assets Wills and against the Quill family shelter they had seen advertised in The Buzz and the Lanzarote Gazette magazines - that would have cost €300 and €11,000 respectively).

The couple remain eligible to eventually pay UK inheritance tax - for life - because they have a British passport (see p14).

The Spanish lawyer was not fully aware of the UK taxation method - or its method of mitigation - and so there were no trusts written into the Spanglish Will - (which would have been impossible under Spanish law in any event).

Thus - when the husband died in Spain - ALL of his estate passed to his wife - along with the £15,000 per year income in the UK - lasting for 10 years.

There is no UK inheritance payable between spouses

In Spain - though - each person separately owns half of their property and cash.

This makes the husband share of the estate €420,000 added to by an obligatory 3% - deemed increment in respect of chattels - of €12,600 - on which Spanish gift tax upon succession is payable - within 6 months.

The Spanglish Will has given everything to his surviving wife - creating tax of 29.75% in Spain after deduction of an exemption of €15,957 of an estate of €416,643.

Therefore the grieving widow has to find - within six months - €85,970 to pay Spanish tax.

By the time that the wife dies - 10 years later - the house has increased - ignoring inflation - by 16% (1.5% a year) and so the widow’s house is - once again worth €600,000 - plus she has €240,000 in the bank - including interest - creating an estate on death of €840,000 (£600,012).

Inheritance tax in the UK is now payable of 40% of £315,000 - being the £600,000 estate- after deduction of the £285,000 ‘nil band’ exemption.

Tax is therefore payable to the UK government of £126,003 (€176,400).

The children must FIRST pay this tax in the UK - BEFORE being able to claim the £150,000 insurance money.



Taxation in Spain upon their mother’s estate is of 34% - of the total estate of €840,000 plus 3% - being €865,200. This is calculated after the exemption of €16,000 to each child.

The taxable base of the estate is therefore €833,286 and tax payable is of €211,440 (£151,031).

YOUR ESTATE IN UK / EIRE YOUR ESTATE IN SPAIN QUILL ADVICE

Nil < €420,000 - Eire Spanish or Spanglish Will OK < £300,000 - UK

Nil > €420,000 Do not write a Spanish Law Will

£300,000 / €500,000 > €1 Do not write a Spanish Law Will

£150,000 < €210,000 - UK Spanish Law or Spanglish Will – OK€250,000 < €250,000 - Eire

< £300,000 - UK Nil Spanish Law Will not applicable - but< €420,000 – Eire a well written UK/Eire Will is.

Should you have a Spanish Will? (> means greater than / < means less than)

Conclusion

The children are thus left - after total taxation, with an estate of €452,160 (or £322,978) - between them - substantially less than the ‘pre Spain’ amount - of €1,050,000 (£750,000).This is because the Spanglish Will - that cost €600 to write through an Arrecife Abogado (not Quill) - has cost the children £176,400 (€126,003).

Worse - however - the advice the parents received from the same Abogado - not to wrap their assets in a Quill Patrimonio Familiar shelter has led to unnessesary taxes in Spain of €85,970, plus €211,400.


Recovering Taxation OverpaymentsIt is sometimes possible for beneficiaries who have suffered ‘double taxation’ - such as in our illustration above to make a claim to the UK Revenue.

Many people - and their professional advisors - can however be lulled into a false sense of security - by optimistic sounding clauses in UK legislation - IHTA 84/5159 - and the Inland Revenue manual - IHT M27185.

This can often turn out to be a ‘mirage’ - because although rules exist to allow the refund (or non taxation) they can only work in situations where exactly the same taxable events have arisen.

The revenue use an example in their manual that demonstrates the ‘hope’ - and - the reality.

The UK Inland Revenue Example says:“Where the property concerned is situate (under UK law) in the foreign country, relief is due under IHTA84/5159 (2) and the credit due is equal to the foreign tax paid.

In practice, the credit cannot exceed the IHT attributable to the property concerned”.

The HM R&C Spain Example

B died in September 2002, leaving an apartment in Spain valued at £50,000. B’s total estate amounts to £300,000 (there were no lifetime gifts) with total IHT payable of £20,000.

The Spanish authorities charge tax equivalent to sterling £4,000 on the apartment on B’s death.

The IHT payable on the apartment is : £50,000 x (£20,000 / £300,000) = £3,333,33. Accordingly, the double taxation credit due under IHTAB4/5159 (2) is restricted to £3,333,33.

BUT - what is not obvious from the above ‘example’ is:

A refund can only apply where the ‘double’ taxation is on an identical basis.

IF - for example B’s beneficiary is his spouse - as there is no taxation between spouses under UK law - there is no basis of comparison.

OR

IF - the tax payable in Spain of £4,000 included the statement that it included a penalty of £2,000 - because the beneficiary was not B’s child - then any refund would be reduced or void.

Double Taxation

As a technical advisor specialising in foreign aspects, I deal with claims for relief under section 159 in respect of Spanish property

Spanish tax assessments show, in respect of each beneficiary, the value of the assets on which the tax is charged less a deduction based on relationship to the deceased etc. to which the appropriate tax rate is then applied.

it would fall outside the scope of section 159 and would not qualify for relief.

If the property on which tax is charged in Spain qualifies for spouse exemption in the UK, then naturally the relief will not be available since it is a relief against tax.



If all of this talk of high taxes seems rather gloomy, you will probably want to know more about the perfectly legal and legitimate escape hatch from Spanish succession taxes (and several other taxes too):

These advantages arise as a natural consequence of bringing yourself, your family AND your money - to Spain inside a well planned and expertly advised ‘structure’.

The ‘key’ is to approach the whole excercise of moving assets to Spain - or developing assets in Spain - as if your family were a small business - because - through Spain’s eyes you are.

You would not expect that Toyota or any other foreign investor bringing money to invest in the UK, Eire or Spain would have to ‘queue up’ for an NIE - follow all the processes - nor pay all the same taxes that a Spanish supermarket worker would? Nor need you.

In the correct structure you can plan for the future destination of your assets in Spain - after your own generation have gone - and:

Become exempt from property purchase taxes

Make whatever succession plans you wish for the future or your family structure in Spain

Remove yourself and your assets in Spain from any and all inheritance and succession taxes in respect of yourself - your spouse - your children - and their children, ad infinitum

Remove yourself and your assets in Spain from Spanish wealth taxes

Conduct the future ‘sale’ of assets in a way that does not attract Capital Gains Taxes in Spain - or your homeland

Sell up in Spain (you or your heirs) and return your capital for the benefit of your homeland family - without Capital Gains Tax arising in the UK or Spain

All of this is achieved by the use of entirely legitimate and normal international estate and tax planning, normally reserved for the rich - but that is equally available to you - for - typically - around 10,000€/£7,000.

Escape from most or many property purchase taxes

Escape from net value asset – commonly known as wealth tax – on your assets in Spain

Escape potentially from capital gains tax

Escape from Spain gift tax during your lifetime

Escape from Spain gift tax upon succession – following death

Escape from UK inheritance tax on your Spanish property

All of these taxes can be avoided - which is not the same as evaded - by accumulating assets in Spain within a Quill Patrimonio Familiar shelter structure.

The Spanish tax ‘escape hatch’




These two (or more) part structures ‘wrap up’ your assets in Spain – and elsewhere too - if you wish – in a family asset holding ‘bubble’.

Uniquely – the structure which can be thought of as a ‘family association’ has no shares.

The assets in the family bubble are controlled by successive generations of your family – starting with the founders (you) - who if husband and wife - have 500 votes each.

Each generation are effectively ‘the caretakers’ of the family assets - through their lifetime.

Following their deaths the votes are taken up by children or - other beneficiaries – who then become ‘caretakers’ for their lifetime.

They are followed in turn by the grandchildren and so on.

At no time are any of the assets inside the bubble taxed.

There is also potential when assets are required to be sold - for that transaction to be capital gains tax free.

Quill constructs Patrimonio Familiar and Bi-cell shelters that are suitable for English speaking people.

This is crucial because no professional could ever advise a family to put its assets inside a structure that was constructed in a language that is not their own.

Shelter structures cost around €5,000 plus 1% of the assets to be sheltered or €6,000 plus 2% where a shelter is constructed to purchase a property, avoiding from 6.5% to 11% in transfer taxes and fees. There is an ongoing cost of around €500 per year which is more than offset by the absence of wealth tax (which on a average foreigners house in Spain is now approaching €1,000 to €1,500 per year).

For further information about Quill constructed Patrimonio Familiar shelters including a range of information booklets, contact Quill Assets in the UK or Spain or by email or visit www.quillgroup.net, or www.bi-cell.info.


After an English speaking person dies in Spain – OR - an English speaking person with assets in Spain dies – whether in the UK or Spain – a series of actions must occur – so that their estate can pass to those named in their Will – or – (if not a (Quill style) Spanish Assets Will) – those entitled by the internal law of Spain.

It should be noted however, that where all of the clients assets in Spain are inside a Patrimonio Familiar shelter, then what follows will not apply as regards those sheltered assets.

Also - if the deceased has instructed ‘dual sys-tem’ wills the process is different as described on page 28.

ScenariosThere are several alternative possible scenarios:

The place of testators death – can be either :

A British/Eire ‘national’ dies with or without leaving property situated in Spain

A British/Eire ‘national’ dies in their homeland - leaving property situated in Spain

The location of the testators estate – which can be one of :

All in Spain

Some part in Spain – with balance in UK/Eire/elsewhere

After you have gone


The type of Will

A Spanish internal law ‘notarised’ Will (i.e. leaving two thirds of the estate between the testators children)

A ‘Spanglish’ notarised Will – (i.e. leaving assets in a Spanish style of Will – but not on the basis of two thirds shared between the testators children)

A Quill style – ‘Spanish assets’ - homeland law Will (i.e. leaving to whoever the testator chose)

A ‘dual system’ homeland will - notarised and registered in Spain.

Depending upon which of these is the case - the actions described below must occur.

Quills UK / Eire / Spain probate serviceQuill organises a swift and comparatively well priced probate service in respect of the situations above – in conjunction with a UK based notary who is Spanish situated in the UK / Eire – and a Spanish Abogado, Spanish Fiscal and Spanish Notary – in Spain.

The Executor deals directly with the UK based notary and the fees illustrated below are ‘rounded up’ a little to allow for any ‘co-ordination’ activity or deliveries required to be done by Quill.

A. Place of DeathWhen death occurs in SpainFor the purposes of UK/Eire procedures and law, Quill obtains the Spanish Death certificate in Spain - (and has it duly legalised with the Apostille before the Ministry of Justice in Spain) and conveys it to the UK office of a notary.

This certificate is translated by the notary – and becomes available for use in the due processes in the UK/Eire.

Three copies of the ‘definitivo’ death certificate must be obtained from the registry in Spain.

One of these must be apostilled at the nearest Ministry of Justice office then officially translated into English – for use in the UK/Eire by :



The Foreign office/Consulate for their information

The Pensions office/revenue authority for their information

In an application for UK/Eire probate where relevant

i Where death occurs in the UK - or -

ii Death of UK NationalA notary public certified copy of the UK death certificate must be obtained and translated into Spanish by an acceptable translator - for use in Spain – wherever it is required, including:

To close or re-organise bank accounts in Spain

To obtain the original Spanish internal law Will (or ‘Spanglish’ Will) where that applies

To claim any pensions or benefits in Spain

To deal with other administrative matters relating to cars, credit cards, utilities, phones etc

B. Location of AssetsThe location of the estate influences the actions necessary to transfer the assets to the beneficaries.

Where the testators immovable estate is solely in Spain

The ‘grant of probate’ is translated by an official Spanish translator and forwarded to Spain under the process – set out in detail below

If all of the immovable estate is in Spain – to pass under a UK/Eire Will – then a grant of

probate is obtained in the UK/Eire by the normal process and that UK/Eire ‘court order’ is translated – or becomes legal and obligatory in Spain

If all of the immovable estate is in Spain – and is to pass under a Spanish internal law Will – (giving two thirds between all blood children) – then the death certificate is used to obtain the notarised Will - with the help of the Madrid registry - and the property forming the estate is divided between the beneficiaries at the notary office, where each beneficiary pays their own taxes and notary fees as - their share of the deceased’s property, is transferred and registered to them.

If all of the immovable estate is in Spain – and is to pass under ‘a Spanglish’ Will – then it is also as above – with the estate passing to the beneficiary(ies) – so long as there is no challenge from the children of the deceased (i.e. as in Denny vs Denny (widow)).

If all of the property in Spain is to pass under a ‘dual system’ will then the first two processes are simultaneously followed.

Where there is a Spanish or - Spanglish willUK probate - and most importantly - the UK Tax Office is concerned only with a UK English Will, UK assets - and - moveable property worldwide.

The UK Probate Regulations demand that the Probate Office receive the ‘one and only’ original Will - which it is not possible to obtain under the Spanish system.


When a local notary, issues ‘copy’ documents - such as a Spanish Will - they have to be legalised at the Spanish Notaries Society.

Under UK Probate Registry Regulations – however - a certified copy issued by the Spanish Notary is not valid.

A ‘legal opinion’ therefore has to be obtained - about the Spanish Will and provided to the UK registry Law - to explain why only a legalised copy of the Spanish Will is available.

In addition to the copy of the Spanish Will a certificate is required from the Spanish Probate District Registry (Registro de Ultimas Voluntades) - confirming where the original Will of the deceased is situated.

C. Where there is no Spanish willIf the deceased does not have a Will in Spain, the Spanish Probate Registry will produce a ‘negative certificate’ - certifying that a Will does not exist in the Spanish system.

D. Process for Spain - where death occurs in the UKFor use in Spain – the grant of probate in its legal form – or if that has already been obtained – a copy called an ‘Exemplification’ is required - together with THE WILL.

The grant of probate is officially translated into Spanish – legalised with an apostille - for use - as follows.

Where Probate is to be obtained, the notary who provides the service will require:

The original English Will of the deceased

If there is only a Spanish Will - then a certified copy Will- issued by the Spanish Notary

The Spanish Probate certificate (whether positive or negative).

Death certificate (If the testator died in England – then a certified copy of the Death certificate).

If the person died in Spain – then a certified copy of the Death Certificate (requested from the Registry Office - a “Partida Literal de Defunción”) which has to be legalised with the Apostille at the Local office of the Ministry of Justice.

UK IHT Tax ApplicationBefore being able to obtain Probate the testators inheritance tax matters must be cleared in England.

This is likely to be the most complex - and difficult - part of the process - and - is an aspect that carries civil and criminal liabilities for the Executor – (and - for whose prepare (and sign) the forms).

Also it is a process now subject to money laundering regulations.

The notary will require from the Executors a list of all assets (movable and immovable) in Spain and England including balances (as at the time of the death) of all current bank accounts, and details of all properties, insurance policies, shares, investments, etc.

The value of any house, is its market value certified by a qualified third party.



That Executors declaration is made as a ‘Statutory Declaration’.

If the Executor/s is/are in Spain, that declaration - which the notary will create as a draft and then work upon with the Executor - will be made before the nearest British Consulate.

If in England it will be signed - with two witnesses.

The notary will also require a Power of Attorney - given to him by the Executor(s) for the sole purpose of obtaining Probate.

Once the Probate is in proper legal form - translated and legalised – the notary has next to deal with the Spanish part of the property.

In this regard the notary will produce - for the Executors and heirs:

Bilingual Inheritance Acceptance Deed according to Spanish law to take over the Spanish property.

A Bilingual Power of Attorney according to Spanish Law to dispose/sell or transfer of the Spanish properties.

A bilingual declaration for the Spanish Tax authority dealing with the inheritance (to declare the family ties with the deceased).

Certify copy of the heirs and Executors Passports

Birth certificate of each heir (to link with the deceased for tax purposes)

NIE application for all direct people involved.

Marriage certificate of: widow/widower.

Also marriage certificates - in case of daughters of the deceased who are married -


(to link with the deceased by their original surnames).

Legal Opinion about English law if applicable or or required.

All documents will be provided in a Bilingual form along with translations of all certificates (Inheritance acceptance, PoA etc).

Payment of UK IHTThe first (and as said - the most important - and complex) task is to sort out any UK inheritance tax that is payable.

The UK Inland Revenue are interested only in tax respect of the UK assets.

This Tax Form could be of 12 pages to 30 pages of instructions.

It is a very complex document - and - has legal force.

Should anyone forgets something - there will be liability for payment that is subject to interest - and possible prosecution - and money laundering penalties.

Once the Form(s) are filed the Inland Revenue will present its tax bill.

The Executor/executors have – to pay any UK inheritance taxes due FIRST - before probate can be obtained. When the taxes are paid a certificate is issued.

Sometimes, these inheritance taxes are so high that the Executor(s) must obtain a bank bridging loan from a bank. They cannot touch – or sell assets until all UK inheritance taxes have been paid.

Grant ApplicationWith a tax certificate – following payment of the tax and/or an exemption from payment - the executor/executrix can apply for a Grant of Probate.

An advertisement will be placed at the London Gazette (which is similar to the Spanish B.O.E.) to advertise for any heir - or closed relative - still living - and - to avoid further claims.


The death of a beneficiary during the processIn the case of older people – or those involved in an accident – the death of the widowed spouse – or a second beneficiary can sometimes occur before the above process has been completed.

If one of the heirs dies - after all the documents have been created and sent to Spain - and are in the process of registration - this has to be treated as a second - independent - Probate.

Everything must then be replicated with the new heirs - involving a new distribution of the Spanish property.

A refusal to grant Probate in the UKIt should be noted from the above that the UK Probate Registry always ‘reserves the right’ to refuse to grant probate where a deceased (1) who dies abroad (2) has no assets in England and Wales - or (3) has assets of less than £15,000 in England and Wales.

This measure exists in order that the Probate Registry can choose to avoid the time and effort of the completion of the Probate purpose where there is no real need.

Picture, for example, a person from India who lives in the UK for twenty years, and then returns to India with all of his or her capital assets - but leaves some family - and a £15,000 car in the UK - and a UK will leaving everything to ‘my nearest relative still living in England at the date of my death’.

That car rightfully belongs to the nearest relative situated in the UK (or even someone in India) - BUT - the costs of Probate would be greater than its value - without even there being tax payable - to compensate.

You must not however confuse this possibility with your situation if you live in Spain with no - or few - assets remaining in England.


Your UK based Assets at deathFirst you may have more UK based assets than you think - arising as a consequence of your death - such as:

State benefits or refunds to which your estate is entitled

UK insurance policies you may still own

Pension lump sums due on death

Other ‘lump sums’ arising in the UK on death

As yet unpaid claims arising ni the UK

As yet unreceived bequests (from the death of a relative in the UK)

The Rules of DomicileNo matter how long you live away from the UK - nor how little of your estate remains there - you are almost certain to remain UK domiciled - in the eyes of the UK revenue authorities - for as long as you have a UK passport.

This - as is normal in all countries - makes you eligible to pay inheritance tax on your ‘worldwide estate’ - whether it is in the United Kingdom or not.

As the only way that tax can be collected by the UK is through the Probate process - your worldwide estate - and in particular your moveable estate is DEEMED to exist in the UK - for the puposes of probate - until or unless proved to the contrary.

It is best therefore to assume that - even if you can prove (though it is hard to do) that you have ‘nothing in the UK’ - that the UK Revenue and Probate Service will not just ‘pass you by’.

Far from it. Upon learning of your death from the local embassy, or the passport service, or UK state pension service, your close relatives will receive a ‘searching’ form to complete and return identifying your assets worldwide.

Failure to complete this form will arouse suspicion and enquiry.



Fees and costsThe cost of engaging professional assistance - such as a solicitor or bank to complete all of the processes of probate following your death is of at least one percent of your estate - and sometimes is charged as much as four percent (i.e. from £5,000 to £20,000 on a £500,000 estate). Quill has negotiated a fixed price service - with appropriately qualified Spanish Lawyers in the UK (Typicall off one half of a percent) that does everything required - as follows:

Full service - £3,000.

To complete the whole Probate service described above for a single deceased person costs £3,000 (three thousand pounds + VAT).

Part service - £2,000.

Where only UK tax and probate is required then the tax application + probate, with everything bilingual and legalised and the acceptance of the inheritance is done by the heirs before a Spanish notary. Fees £2,000.

Translations only - £750

If probate is already granted - then to obtain certify copy from the registry, translation and legalised and send to Spain. Fees (around) £750 subject to the extent of the Will translation.

Negative UK certification from the probate registry

Where there is no UK Will the Spanish notary will need a negative certification from the UK registry. To obtain this negative certificate, translate, legalise and send to Spain - £350.

Translation of death certificates

To translate the certificate, legalise and send a death certificate to Spain - £200. If it becomes necessary to request the certificate from the registry (whether marriage, birth, death) there is an additional charge of £100.

Fee Scales

An appropriate breakdown of the various aspects of the fees, where and is applicable, (excluding VAT) is:

Bilingual Inheritance Acceptance Deed - £600.00

Bilingual PoA - £200.00

Spanish Tax Declaration by heirs - £200.00

Legal opinion of English Law - £600.00

Negative Certificate by the England and Wales Probate - £100.00

Translation - £0.15p per word translated. Minimum £100.00 per document

Legalisation at UK FCO - £40.00 per document

Certify copy of a Passport - £30.00

Advertisement in the London Gazette - £120.00

To gather legalisation of all documents and send to Spain - £80.00

N.I.E. application form - FREE.

Tax application for Inland Revenue - £200.00 per hour.

To obtain Probate before the Probate Registry: £250.00 per hour.

NOTE : If it is a simple application after the Tax Certificate is in place - together with the Original Will – this might take only half an hour. However - if the Probate Registry asks for more information (such as legal opinions) - then the applicable fees are added.

If the notary have to gather certificates from the Birth, Death, Marriage Registry or Probate fees, will be requested by individually agreed.

Exclusions from the above

The fees above do not include:

Any fee that have to be paid to the Probate Registry (presently around £100.00)

Taxes (whether UK or Spanish);

Travel to the home of the client or – where facilities have to be organised locally to the client for signing ;

VAT

Services of Gestorías in Spain - for paying taxes, Town Hall, Land Registry and others.

Family Court hearings – where the Probate Registry reject to issue a Probate.

The Probate Registry where they – for example - initially - refuse to issue a grant of probate where a British person has died abroad with no assets in England or Wales – and / or - when his/her assets in England are lower than £15,000.00.

The fees involved in the signing of the Statutory Declaration and Power of Attorney - by the Executors or heirs to process the Probate.

The costs associated with the visit and interview - if the case - at the Probate Registry by the Executor.

The Probate Registry will want to interview - the Executor – for around 20 minutes to check:

whether he is able and can handle the authority that was giving by the Will and

that he accepts to be the Executor

A Power of Attorney to the notary may be sufficient to replace this information.

NOTE: All fees - which are paid directly to the notary - are subject to VAT



A dual System WillFrom the point of view of writing your Will – and many other things too – the problem of owning property in Spain as well as being the UK passport owner is that you have your feet in two different legal systems.

In several situations – including the law of succession – these systems irreconcilably differ.

In order to deal with your estate you must decide which legal system to write your Will under.

You have seen that writing your Will under the Spanish legal system exposes you to potentially huge additional homeland inheritance tax bill – and the potential for that Will to be overturned if it does not exactly accord with the internal law of Spain (i.e. giving two thirds of your estate directly on your death to your children).

The ‘problem’ with writing a Will under your homeland law – which is tax efficient – has no constraints – and cannot be challenged - is that the Will first has to be proved in the UK – along with a grant of probate, which then must be translated and apostilled - before the grant can be used in Spain.

It can therefore be a ‘slowish’ process taking a month or two - and - costing your estate around €3,000 after your death.

A Dual System WillIt is possible, however for you to write a Will that fits into both systems.

This Will is written under your homeland law and then translated into Spanish, notarised and put into the Spanish system.

The English and the Spanish clauses run side by side and the Will is both signed and witnessed under English law - and notarised under Spanish law.

The original Will is kept in your homeland (i.e. UK or Eire) whilst a notarised copy goes into the Spanish system - exactly as it would for any Spanish national.

The Will therefore is legally binding and valid in both systems.

Following DeathUpon the death of the testator - the English or Irish original goes into that countries probate system

- and a grant of probate is obtained - for homeland purposes.

Simultaneously – and without any delay – the Will that is in the Spanish is produced in Spain and is immediately valid – able to be used by lawyers in Spain to deal with the estate in Spain.

This is the perfect solution from all points of view – and you will be wondering why it has not been proposed before.

Cost The problem with this type of Will, however, is its cost.

A dual system Will is not only doubly effective – it is also doubly expensive !

This combines the cost of both systems - including the cost of interpretation and notarisation.

These Wills cost €600 each – i.e. €1200 for two husband and wife mirror Wills.

You may feel that this is not excessive - by comparison with your estate - and - so long as you do not intend rewriting your Will every few months – it is the surest way to go.

Beware of changes One of the major differences between the English law system and the Spanish law system of Wills and succession – however – is that whereas a Spanish national has little or no choice as regards the content of their Will – and British or Irish national can change their mind about who is to receive their estate as often as you wish.

If an English or Irish parent become disaffected by one of their own children they can even cut them out of their Will - which it is not possible for a Spanish parent to do.

It is for this reason that whereas a Spanish national is likely only to write one Will in their entire life – a British or Irish person will write several.

The Dual System Will is therefore a very good choice for someone whose estate is of such substance that the €500 or €1000 cost of the Will is still appropriate – even though it might be replaced – or – where the testator is pretty certain that there will be no frequent changes in the wishes reflected – before their death.



You do now have ‘the facts’ at your fingertips

You have worked hard to reach this point in our booklet.

If you have followed the issues and figures - then by now you do have all of the facts at your fingertips.

We anticipate that your conclusion will be that there are occasions when a Spanish Will might be right for you – though that is a curious thing - for a citizen of one country to write something as important and personal as a Last Will and Testament in a language and legal system that is not their own.

As there is no disadvantage - and you have seen from the Adams v Adams precedent - an established advantage in writing a UK or Eire Will covering your Spanish assets – and no risk – we cannot offer any logical advice to do anything other than that. Though many firms of estate agents, abogados and fiscals in Spain give contrary advice, often with great fervour!

The small printIf you followed everything so far there really is no reason to carry on right to its back (i.e. to read the small print of the two relevant treaties and Article 9).

Lawyers in ChaosWe include - below - an article dealing with popular myths - that sometimes fall from the mouths of local lawyers - unfamiliar with the willwriting practices of English speaking people (why should they be) - or even with Spain’s private international law.

This deals in a practical way with a number of anomalies between our systems too, such as the word ‘solicitor’.

Also an article reproduced from a recent Sunday Times alerting those with property abroad to the UK Revenue’s posture.

These and other items that follow are only for the complete ‘trainspotter’ - who wants to see and know everything - and - for the benefit of our professional colleagues in both Spain and the English speaking world, who like to work through these issues crossing every ‘t’ and dotting every ‘i’.

Acknowledgement - Legal ResearchThe Quill Group is a member of the Willwriters’ Association and the Association of Lawyers whose experts have diligently researched this area of legal advice and whose findings Quill are grateful to be able to reproduce in this document.

Conclusions

Quill on Spanish Asset WillsFor English Speaking People

No.WA2000/5/21



The Revenue is getting tough with thousands of people who have bought a property abroad. By David Budworth.

Hundreds of thousands of families with overseas homes face greater scrutiny from the taxman after the government launched a crackdown on foreign property last week. Revenue & Customs thinks that many families are using their overseas homes to dodge inheritance tax and has warned that people could face prosecutions and fines if they fail to declare them properly.

Even families that have settled overseas could face an official probe: while most imagine that once they have emigrated they are safely out of the clutches of the UK taxman, the truth is that many will still have to pay inheritance tax (IHT) to the British authorities.

Anita Monteith at the Institute of Chartered Accountants in England and Wales said: “If you have inherited foreign property and not declared it, the Revenue is saying we are coming after you. Even if you have failed to pay the tax accidentally, you should be worried.”

About 250,000 British residents own property overseas, according to the Office for National Statistics, and a growing number are moving abroad permanently. About 200,000 Britons emigrate every year.

One in five of us - nearly 10m adults - is considering fleeing the country for a new

life in foreign climes, according to a recent poll by researcher ICM, and Britain’s high taxes and soaring cost of living are the prime motivations.

David and Susan Le Cuirot from Fleet, Hampshire, are typical. They plan to retire overseas after buying a three-bedroom villa near Paphos, Cyprus.

David Le Cuirot, 49, an IT consultant, said: “I’m disillusioned with Britain and don’t think it has anything to offer in retirement.

“I can run a house in Cyprus for £1,200 a year, which wouldn’t pay half my council tax in this country.”

There is widespread confusion about how British income, capital-gains and inheritance tax apply to foreign property, however as shown by the government’s latest crackdown.

UK inheritance tax, which is levied at 40% on assets above £285,000, will apply to your worldwide assets, including your home, for as long as you remain “domiciled” in the UK.

The law says you normally take domicile of your father, and it is extremely difficult to revoke it even if you emigrate.

Justin Rix at Grant Thornton, an accountancy firm, said: “It’s a common misconception that if you move overseas permanently you are no longer liable to UK inheritance tax. Even when you are living in a foreign country, your family maybe subject to British inheritance tax on your death.”

And tax officials are getting tougher. In a newsletter to tax advisers last week, they warned: “For the remainder of 2006 we will be paying particularly close attention to foreign

Taxman targets overseas home owners

A warning - taken from The Sunday Times, Sept


10th 2006

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assets. Where it appears the accountable people have been negligent we will consider whether a penalty is appropriate.”

If a return is filed, officials will check whether household contents have been included as well as the value of the property itself.

They will also investigate whether the foreign surveyor has undervalued the property, and come after people who have not declared profits.

Accountants also warn that British people who own property abroad through an offshore company also need to be aware of the UK tax authorities.

In popular destinations such as France, Spain and Portugal it has been common to use offshore companies to avoid local taxes and inheritance laws. But the Revenue has recently announced that homes owned by UK residents through a company structure may be taxed as a benefit in kind.

The charge would be based on an assumed value for the property, and can run into thousands of pounds. If you want to avoid the tax, it is best to seek specialist advice.


are relying on second-hand information incorrectly repeated - or - there may be a language problem.

Whatever is the reason there is CHAOS in the English speaking ‘calles’ (streets) - and we have to conclude - that it is often local lawyer’s who have insufficient knowledge of international law who are causing this.

The document shown alongside - is an example of two firms of local lawyers publishing information - that is

In these pages we repeat our published responses to an advertorial placed in the Lanzarote Gazette by six local Abogados - making very public their ‘outrage’ that anyone - other than local Spanish lawyers with a lifetime of Spanish experience - could seek to advise foreigners about their wills and succession and taxes in Spain.

Their views however overlook the crucial fact that wills - the world over - are governed under international agreement by the national (i.e. home) law of the deceased.

Their ‘angry from Orpington’ reaction goes straight to the main agenda in this regard - and has consequently been very helpful in highlighting common misconceptions.

No one wants to pay tax that they need not pay. No one wants to think that they have written a will that conceivably might not work.

Think for one minute of throwing a lot of your money into the air and watching it blow away That is what either of these things is like doing.

Quill has been holding ‘Getting to know Spain’ meetings for two years - in its efforts to help English speaking people who own


Uninformed local lawyers can cause serious financial damage

Fact: Spanish Asset Wills of UK or Eire nationals do not have to be notarised...

assets in Spain to know everything they need to know about these subjects .

The levels of confusion that people bring to these meetings - about these subject’s - and other related issues is nothing short of astounding.

It is possible that they have not properly heard what they’re being told by local lawyers - or - that they



at best out of context - and at worst completely wrong - as it applies to English-speaking people with assets in Spain.

They do this - very confusingly - in the name of ‘THE LAW SOCIETY’, which does not actually exist in Spain!

What they say might be accurate - and fine - if told to a local Spanish national - but NOT when given as relevant legal information to any reader of a magazine for English speaking readers.

It is an illustration of lawyers causing chaos - this time - in writing.

People - mainly - want to be told by experts and professionals - what to do for the best - and NOT to see or here the legal arguments behind that advice.

These issues are so important there are people who would like to know exact information - from a source that simply cannot be argued in order to turn these important matters into ‘black and white’.

We therefore offer the ultimate answers.

How - you might ask - can we say they are ‘the ultimate answers’? It is because they are based upon judgments from court hearings in theUK and Spain that have arisen settling these very issues.

Judgments are the ultimate test of everything legal both in Spain and the UK.

Statement 1.Only a will that is granted before a Public Notary can be considered a valid Spanish will.

This is a relevant point when referring to people who are Spanish nationals.

When the target audience for this view is only to foreigners it is wrong - has no logic – and is possibly only made for commercial reasons.

Foreigners all have two options upon the type of will they can write under Spanish law.

Article 9.1 of the Spanish Civil Code says that “... the personal law of natural persons (i.e. human beings) shall be determined by their nationality (in most cases by their passport)”

Article 9.8 says testementary dispositions... which conform to the national law of the testator ...(i.e. a Quill will for Uk Irish families etc)... shall... be valid even if the succession is (then) governed by another law ... (meaning governed by laws different to Spanish domestic/internal law).

A will under Spanish domestic - or internal - Law is also valid for a foreigner - only providing it gives two thirds to the testators children.

Most English speaking people do not want this to happen - and so they require a Quill will.

This is a matter that has been well tested by the courts in both countries.

A regular ‘challenge’ upon the wills of ‘English speaking people with assets in Spain’ occurs when a father re-marries and leaves his estate to his second wife - and not his children from his earlier marriage.

There is normally nothing that can be done in this situation where a UK/Eire will has been written - with complete freedom of disposition.

But - if a Spanish will is written - leaving property to the spouse - then that Spanish - or Spanglish will can be challenged under Spanish law - which requires two thirds of the estate to go to the testators children.

Google will take you to what is still the main precedent - of 31 July 1985 - when it was ruled - and never ‘reversed’ - that the English law Spanish assets will (i.e. the Quill Will) of Christopher Adams was valid under Spanish law - giving his estate to his wife - and not - as Spanish internal Law requires - two thirds to his children.

A Spanish judge is required only to apply Spanish domestic law.

Thus in an identical type of claim - in a Spanish court - in 1995 - the second wife of Timothy Denny - under the strict terms of Spanish internal law - was stripped of the estate - left to her in a Spanglish will - which then went to her late husbands children.

In this case it turned out ‘ok in the end’ - BUT - only after two more court hearings taking 5 years and one hundred thousand of euros!

Quill does not ‘care’ which type of will it arranges for its clients.

It can provide four suitable types of will - BUT - WHY would any foreigner want to expose themselves to court hearings in Spanish - when an UK/Ireland law Spanish Assets will is guaranteed - by a twenty year old court precendent - to work - and is accepted by the Supreme Courts in Spain - the UK and Eire.



About moneyIf any English/Irish persons total estate has a value greater than £300,000Uk/€500,000 Eire - then ANOTHER big reason not to go anywhere near a Spanish will - is that doing so will automatically cost £110,00 UK/€100,000 Eire - in - unecessary domestic tax.

Statement 2.Any other kind of will that has not been granted before a Public Notary will require a legal validation from the country of origin or probate to be accepted as valid for the inheritance of assets in Spain.

This statement is correct. It - however - is written as if to infer that there was something complex - or difficult - about the process described.

The opposite is true. Where the correct form of Spanish Asset Will exists - written under your homeland law - but - in a manner that is helpful and acceptable to the Spanish process - then that does not require not be notarised until after your death.

There is a longer document available from the Quill web site - or in print - on this topic - and ‘After you have gone’ - page 22.

Following your death your Quill Will goes to the appropriate probate registry in the UK / Eire.

Quill makes use of a notary operating in London / Eire - who is Spanish who deals with all of the relevant processes through to the obtaining the UK / Eire grant of probate setting our your wishes, exactly as put in your Will.

Everything can be included through to the registration of the grant of probate with the Spanish authorities and the registry - and the liaison with a local Abogado on the island - to deal with any transfers and taxation matters.

This is a painless, swift and inexpensive generally costing no more than £2000 / €3000 which is wholly inclusive of everything from handling the death certificate in Spain to the final transfer of the estate. This is no different than the typical cost of probate under any system - i.e. in the UK/Eire or Spain.

Statement 3.The British authorities will not grant probate if the deceased does not own any assets in England. Consequently, any Will for British citizens who do not own any assets in British territory will be of no use to the testator if it has not been granted before a notary in Spain.

This is a dangerous piece of widely circulated over simplification that has no basis of fact in law.

British servicemen and civil servants have - for centuries soldiered and served abroad throughout the ‘empire’. It is totally normal for a British citizen (passport holder) to have all of their assets out of the country - though of course is probably unusual in Spanish eyes.

Under UK law - which is what applies to any UK national (i.e. UK passport holder) assets are of two types. (1) Moveable (cash etc) and (2) Immoveable.

Under the Wills Act 1963 a will of moveable property - meaning property that might be anywhere in the world including Spain or the UK - is ONLY materially valid if it complies with the law of the domicile (i.e. passport) of the testator.

The rules on this are for all to see - in every European language on the European community web site ec.europe.eu/civiljustice/applicable-law/applicable-law-eng-en.html.

Because of this the British authorities are likely to always grant probate to any British national - to enable his executors to take control of immoveable property wherever it may be situated in the world.

Also - because the UK is ALWAYS entitled to inheritance tax upon the estate of a UK citizen / passport holder / domicile - which they can ONLY calculate and gain access to through a UK grant of probate - a grant is never likely to be refused.

The UK Probate Office does have rules available to it to save time and expense – by refusing to grant probate where an estate is worth less the £15,000 – or (where there is no other good reason) for someone with no assets in the UK.

This rule is however usually only ever used where there are not only no assets in the UK – but – no taxable assets worldwide – and – no executors – or beneficiaries in the UK

Statement 4.The inheritance tax applicable will be the same, independently as to whether the deceased holds an English, or Spanish Will or is intestate.

It is not often in this document that they are right - but ‘The Lanzarote Law Society’ are VERY wrong this time.



What they look to be telling you - and all their (unfortunate) past and future clients - is that you have the same tax position with a Spanish law Will - OR - a Spanglish Will - OR - a (Quill Will) homeland law Will.

This is a complete misunderstanding of UK inheritance tax as it applies to assets in Spain.

For any UK citizen this advice is wrong to the tune of £110,000 - or to an Eire citizen €100,000 !

If fails to take account of the way in which inheritance tax works in English speaking countries - involving a ‘nil band’ - upon which no inheritance tax need be payable. Thus in the UK £285,000 of every person’s estate in the ‘nil band’ on which no inheritance tax is payable.

So long as they have CORRECTLY WRITTEN WILLS a UK couple can pass on £570,000 (€810,000) tax free to their children or beneficiaries when they die.

Half this ‘nil band’ exemption is lost however when one spouse transfers everything they own to another spouse - which is the traditional English speaking way of doing things - unless the Will of the first to die contains a special nil band mechanism.

No ‘Spanglish’ Will ever written by either of the firms calling themselves the Lanzarote law Society (ASG and Izqueierdo de la Cuerva) has ever - or could - include a ‘nil band’ mechanism.

If you have one of these Wills you should ask them to explain this important aspect to you - and if they cannot - come to Quill.

Example:If you have £285,000 property in the UK and a €400,000 house here in Spain - then notarising a SPANGLISH Will - through a Collegiate of Abogado lawyer - on the basis of this advice will cost your family £110,000 in UNNECESSARY taxation.

With a Quill Will - in this example - you will pay NO homeland inheritance tax.

If your worldwide estate has a value greater than €400,000 you should not write a Spanish or Spanglish Will - but should first talk to Quill.

Statement 5.British citizens resident in Spain and only owning assets in Spain are subject to Spanish testamentary law.

The Abogado making this statement have - surprisingly - completely misled themselves upon Spanish law.

Spanish internal law relating to succession is set out in a number of acts under which either all of the assets (if there is no valid Will) - or two thirds of the assets (where there is a valid Will) - must pass ‘down’ to the children of the deceased.

Foreigners - whether they are living full or part time in Spain - or who live abroad and have property assets in Spain are all treated identically - under the rules of private international law, which Spain has adopted by way of 9.1 to 9.12 of its civil code.

It is only those British citizens who do not write a valid Spanish Asset Will that are subject to Spanish testimony law.

The proof of this is to be seen in English - through google - in the supreme court of Spain judgement of Senor D. Pedro Gonzalez Poveda on the 5.5.1999.

In a matter concerning the assets of a British testator who lived (only) in the district of Salvatierra de los Barros, Spain - and with all of his assets scheduled in the Will being in Spain - those assets were ruled - in a judgement that has never been superceded - to be distributed under the UK law of succession - and NOT that of Spain.

This is the definitive position that exists in Spain today - and NOT that as stated by ‘The Lanzarote Law Society’ Abogados.

If you have all your assets in Spain you have a choice to (1) have a notarised Spanish internal law Will dividing two thirds or more of your estate between your children leaving out your spouse – but not (2) a Spanglish Will giving to a spouse – or – (3) you can write a Will under your national law giving your estate to who you like.

If you follow (1) it will be upheld – under UK and Spanish internal law even if challenged by your wife.

If you follow (2) it can be overturned – exactly as Timothy Denney’s ‘SPANGLISH’ Will was – and – the two thirds of the property given to your spouse would be transferred to your children.

You may feel your children would ‘never do this to you’. They might not – BUT – could be forced by an ex spouse or creditor.

Anyone with assets only in Spain should have their Wills checked by Quill.

If you follow (3) it will always be upheld - no matter who you give to.


Statement 6.British citizens with assets in various countries are subject to British law and therefore if they wish to prepare a will in Spain, this would be granted before a Spanish Notary but according to British law. In this case English wills with probate would also be valid.

What the Abogados leave out - however - is that the Spanish Will sworn before a notary is capable of being challenged - as happened in the case of Denny vs Denny (widow). The Spanglish Will written by a Spanish Abogado was overturned by the Spanish judge - and the widow was stripped of the assets given to her by her husband under that Spanglish Will.

Two thirds of the estate she had inherited from her husband was taken from her and transferred to the testators children from his first marriage.

Furthermore these Spanglish Wills - notarised in Spain - can contain no homeland tax provisions and lead almost automatically to an unnecessary £110,000 (UK) or €100,000 (Eire) taxation being paid.

What the Abogados are saying in the last sentence is essentially correct and echoes what we say.

Statement 7.Any sale of property or shares owned by a Spanish Company is liable for taxation.

The Spanish Abogados have - surprisingly - misled themselves upon a matter of Spanish law.

If this point is supposed to refer to the shelter structures created by Quill then we are not certain of its purpose - because a situation where a Spanish company owns shares in another company does not arise in a Quill formed shelter structure.

For good order however - it is perfectly possible for a Spanish company that owns shares in another Spanish company to sell those shares without being liable for any tax whatsoever.

If the shares are sold at a loss - or at the price they were purchased - then there would be no capital gains tax - and - in most cases nor will there be stamp duty.

If the shares are sold at a profit - then there will be capital gains tax - and - if the shares are of a company whose assets are more than 50% property - or - if the shares are sold before one year - or - where the sale creates a single shareholder with more than 50% - then stamp duty (though not tax) will apply.

Also whether or not Capital Gains Tax is payable in Spain by a foreigner depends entirely upon the double taxation treaty between the two relevant countries.

Statement 8.Pursuant to the recent legislation enacted on the 30th November 2006 to prevent tax evasion, any transfer of shares of non-resident companies owning real estate property in Spain, or any transfer of shares in a Foreign Company with shares in a Spanish company owning real estate property in Spain will be considered as a transfer of the property itself and taxed accordingly. This applies to any kind of transfer, including by inheritance.

If this statement is intended to apply to Quill shelter structures - then ‘The Law Society’ Abogados have failed to understand the nature of a shelter structure.

What appears to be referred to here are regulations governing companies in ‘tax havens’.

Quill shelters involve Spain and the UK. Neither is a tax haven. Shelter structures have no shares. They are controlled by votes.

There is therefore any transfer of shares in a foreign company referred to - either on resale of the shelter or on the death of one of its founders.

Quill Patrimonio Familiar shelter structures perform exactly as we say - which is to eliminate all inheritance taxes - potentially capital gains taxes - wealth taxes - and gift taxes - in respect of the assets in Spain that are sheltered - from both UK / Eire and Spanish taxes.

Why are these abogados attacking Quill?

Quill has been holding open days for two years freely assisting people to understand issues relating to their Wills, taxation and residency and anything else that has arisen.

The levels of confusion and misinformation that are brought by those attending these meetings has been so bad - and with such awful consequences for those people who are misled - that Quill is taking the unusual step of replying to a public document that demonstrates the inability of some local lawyers to properly advise English speaking people who own assists in Spain.

This is one in a series of four replies to specific claims made by a group of six lawyers - calling themselves - for



questions of Wills and succession - and the legitimate avoidance of homeland and Spanish taxes by English speaking people.

What are ASG and IDL clients missing out on?

Law firms on this island have - for some time - been in a position to advise clients to make use of the bi-chamber asset protective cell protocol - (known as ‘bi-cells’) that Quill has successfully introduced here.

‘Bi-cells’ enable people who are purchasing property anywhere in Spain to do so paying only 2% AND NOT 10% in purchase costs.

The buyer of the property - instead of paying €30,000 in tax costs pays around €10,000. Vendors are able to sell their properties with ZERO selling costs. Generally saving 8-10%

The vendor (seller) of a €300,000 property - using bicell technology receives €300,000 - without (a penny going missing to estate agents fees or withholding taxes (and with a potential dramatic reduction of capital gains tax).

The ‘Lanzarote Law Society’ Gazette article makes it clear that these Abogados have no working knowledge of all (if any) of these crucial sources of law.

It makes ANY Spanish law or ‘Spanglish’ Wills they write for UK (or Eire) clients potentially INEFFECTIVE for homeland tax purposes - as well as being inherently unstable and open to challenge.

Clients of these law firms and any others who follow their views are exposed to RISK and HIGHER TAXES than they would be with advice from Quill Wills, Quill Assets and Quill Realty.

1. Your beneficiaries - of a Spanish / English Will - could - like Mrs Denny - be stripped by a Spanish court of their inheritance.

2. Your family could (quite easily) pay £110,000 (UK) - €100,000 (Eire) in UNNECESSARY death taxes.

3. You could pay around €25,000 too much when you buy a property in Spain * and €25,000 too much in outgoings when you sell a property in Spain * (based on a €300,000 example).

What should you do?

Bring your Will and taxation position to Quill - and receive our free advice - and copy of SPANISH ASSET WILLS FOR ENGLISH SPEAKING PEOPLE.

Then - either follow Quill’s advice - and sleep peacefully - or - take our advice back to ‘The Lanzarote Law Society’ - for their comments and observations.

Best of all - come to a Quill open day and air your questions and concerns - to receive complete and accurate and effective answers.


the purposes of publicising their claims in magazines read by English speaking people - the ‘Law Society’.

They are actually members of the ‘Lanzarote Collegiate of Abogados’ - but possibly felt that describing themselves as English Solicitors do, might give greater impact to their version of events ? (you should ask them).

The purpose of their activity is of course wholly commercial.

They no longer wish to see English speaking people - from whom they have earned very large sums of money over twenty years - continuing to turn to Quill for its more effective Will and tax advice - which these Spanish Abogados simply cannot compete with.

What if you are one of their clients?

Lawyers should be making life easy for you.

You need a Will and you do not need to pay any more tax than you need.

Lawyers should be writing you a Will that will give you security and tranquility.

You want to know that you have taken adequate precautions that will work - and then when you die should not involve your families in the potential of having to argue in a Spanish court - in a language they do not understand - about issues that are foreign to them - with a very good chance of losing - under the set rules of Spanish internal law.

No Quill Will can ever put you in that position.

What your lawyers should also be doing is providing you with tax advice that suits your circumstances and nationality - Not just treating your tax situation with indifference.

You should bring your affairs to Quill - to hear what you should have been told about these matters.

What if you are a Quill client?

You should ignore these so called ‘facts’. On the basis of their own jointly worded literature / article - these two firms of lawyers - ASG and Izuierdo de la Cueva y Lleo - and / or The Lanzarote Law Society - and / or any other Abogados who endorse or share their views are UNSAFE for an English speaking client to listen to - on


All moveable wealth - worldwide - will be inheritance taxed by the country of domicile - i.e.. UK - AND also by any other country where the deceased was a tax resident (with no automatic double taxation relief available).

The Rules of ‘Lawdo’The Rules of ‘Lawdo’applied each time a foreigner dies with assets in SpainFollows Spain’s adoption

of the Convention of the Hague of 5th October 1961

Follows the UK’s adoption of the Convention of the Hague of 5th October 1961


1. FIRST LEGAL PRINCIPAL (Spanish law)

Responsibility for the estate of a deceased foreigner lies with his or her homeland country i.e. the UK/Eire

2. SECOND LEGAL PRINCIPAL (UK law)

All fixed assets will be dealt with under the law of the country where those assets are situated - thus:

Immoveable Property in the United Kingdom is disposed of under the UK inheritance law and taxation.

Immovable property in Spain is disposed of under Spain’s succession law and taxation.

Are ‘the Law Society’ authoritative or official?We have pointed out to English readers that the use of the words the ‘Law Society’ appear to be deliberately misleading.

Abogados belong to the ‘Collegiate of Abogados’, which is the only name these lawyers were entitled to use.

But - one must ask - were they were entitled to use that even ?

Are these six individual lawyers the duly elected officers of the ‘Collegiate of Abogados’ responsible for publicising the feelings of the ‘Collegiate of Abogados’ or its members - or - are they merely a gang of six - who have taken upon themselves a pompous sounding name (and to English speaking eyes a serious authoritative body) - in order to pursue theirs - and only their - commercial objectives ?

A ‘Lanzarote Law Society’?Solicitors in the English speaking world - belong to their ‘national’ Law Society - which exists pretty much throughout the entire commonwealth.

It is a world renown regulatory body - providing - among other things - unlimited Professional Indemnity Insurance, in respect of losses caused to a client by negligence of the Solicitor.

Lawyers in Spain are called Abogados and belong to the Colegio de Abogados - or Collegiate of Abogados.

Most importantly - membership of the Colegio de Abogados does not include mandatory professional indemnity insurance cover in the event of an Abogado being negligent.

It is curious - and potentially very confusing for some Abogados to refer to themselves in advertisements that appear in English speaking magazines - though nowhere else - as being members of the Law Society (or Lanzarote Law Society) and - by reference to their Collegiate of Abogados number ID.

It would be much clearer to say what is fact. They are members of the Collegiate of Abogados.

The ‘Lanzarote Law Society’ - seemingly - has six Members

No. 27. Eileen Izquierdo Lawlor. [IDL]

No. 33. Jorge de la Cueva Terrer. [IDL]

No. 39. Ángeles San Gregorio. [ASG]

No. 50. Santiago Lleó Fernández. [IDL]

No. 225. Mario Izquierdo Lawlor. [IDL]

No. 295. Mari Nieves Domínguez Castro. [IDL]

People who attend our open days OFTEN think that these Abogados are ‘Spanish Solicitors’ who (somehow) are members of the UK or Irish Law Society - and are covered by the same indemnity insurance as an English or Irish Solicitor. Other than for a very few lawyers who practice in two countries and belong to both organisations - they are not.

Why - (would any reader like to tell us?) - would 5 abogados belonging to IZQUIERDO , DE LA CUEVA Y LLEO and 1 belonging to ASG - present themselves to readers of the Gazette as ‘THE LAW SOCIETY’.

The least you would be expected to believe was that they were elected members speaking on behalf of the 300+ College of Abogados - which they are not.

You might equally however have thought this notice was an official LAW SOCIETY statement - which it is not. You might have expected it to be authoritative and correct, which it is not.

page 41

nUK Version

3. THIRD LEGAL PRINCIPAL (Spanish Law)

The property of a foreigner in Spain can be disposed of by Will under the law of Spain - strictly in order - as follows:

If there is a separate valid will - dealing with the assets in Spain – or if all of the assets in Spain are dealt with in a valid UK will - then a UK grant of probate will be used by Spain to distribute the estate in Spain under the law of disposition of the UK.

If no valid UK will is found but letters of administration (intestacy) are obtained in the UK - that specifically refer to the property in Spain - they will be used by Spain to distribute the estate in Spain under the law of disposition in the UK.

4. FOURTH LEGAL PRINCIPAL (Spanish Law)

If a will exists under Spanish law then the property will be dealt with under the ‘normal’ law of Spain – as if for any Spanish national - with 66%> going immediately to the children.

If no legally binding valid UK will – SPECIFICALLY covering the property in Spain - nor Spanish will can be found - the assets in Spain will be dealt with under Spain’s rules of intestacy and divided equally between the children of the deceased.

5. FIFTH LEGAL PRINCIPAL (Spanish Practice)

If a SPANGLISH will - written for a foreigner under the Spanish system – but not under Spanish law - is found – then (at present) the Spanish authorities will probably ‘prove’ it.

However - if this will is ‘challenged’ - (for example - because it leaves the black sheep of the family out of it, or for any reason) - and - it becomes necessary for it to be sent - under apostile - for use in aUnited Kingdom court hearing – then - it will inevitably be declared invalid in Spain - and consequently cannot be used in the UK.

© Quill Wills in Spain 2007

Follows Article 9 of the Spanish Civil Code

This type of will can do nothing to mitigate homeland inheritance taxes.

Follows ‘core’ Spanish law and practice. It is important to note that no concession is given to ‘homeland’ law or practice


Is it that the ‘Collegiate of Abogados’ has knowingly put its name to the frequently misleading - and in places technically incorrect - legal information?

We have been unable to find any other lawyer on Lanzarote who is aware of what is being said by these six individual lawyers - as if in the collective names of all Lanzarote lawyers.

Lawyers back to school?For a lawyer - be they abogado, solicitor or whatever - to offer advice to English Speaking people in these areas he or she MUST UNDERSTAND the relevant legislation perfectly. The 1836 Wills Act as amended by the 1963 Wills Act and its

Eire derivitive as amended by the

The international treaty of the hague of 5 October 1961 as adopted by the UK on 13 February 1962 and in Spain on 5 January 1964

Spain’s INTERNAL succession law

Spain’s international private law as applied in section 9.1 to 9.12 of its civil code

The relevant supreme and appeal court precedents in these specific matters including the Adams vs Adams (widow) and Denny vs Denny (widow) judgements

The way that UK and Eire Inheritance Tax works - and how it is avoided through a will

The 1976 double taxation treaty between the UK and Spain

The (crucial) Renvoi doctrine and the principal of ‘unity of succession’ meaning that succession should only ever be governed by the law of Single Jurisdiction.

Those who do not should leave this area of activity alone.


Adams - vs - Adams (widow)A will written under UK law – Quill Will style – which C.W. Adam’s children attempted to overturn - in favour of themselves – under Spanish internal law. They failed.

BackgroundChristopher William Adams was an Englishman who owned property in Spain.

He died in 1982 and his UK (i.e. own nationality) will – made his wife Beryl Adams the sole legatee of both Spanish apartments.

BUT – was this UK ‘Spanish assets’ will valid - or - were his children entitled to inherit part of the estate as obligatory heirs under internal Spanish Law?

If this will had been written under Spanish law – as a Spanglish will - it could fail - as in Denney v Denney (widow)

When put to the ultimate UK courtroom test - a Spanish Asset wills – of the type written in Spain for English speaking people – by Quill Wils – can not fail.

If this will had been written under Spanish law – as a Spanglish will - it could fail - as in Denney v Denney (widow)

Sentence of the High Court of Justice Chancery DivisionVice Chancellor Court 31 July 1985

In the case In Re-Estate of Christopher William Adams / (deceased)

Judge: Sir Nicholas Christopher Henry Browne Wilkinson

(Cited in Denney Case - Spanish Supreme Court 27 May 1999)

JudgmentHAROLD CHRISTOPHER ADAMS v BERYL DOREEN ADAMS (widow)

VICE CHANCELLORIn this case I have to determine who is entitled to two apartments at Alicante in Spain which form part of the estate of Christopher William Adams (“the Testator”).

The Testator died on 3 April 1982.

By clause 3 of his Will he bequeathed to his wife, the defendant absolutely “all my real and personal property whatsoever and wheresoever and especially my property in Spain”.

The Testator was survived by the defendant and his son, the plaintiff. The Testator was domiciled in England and Wales and it is agreed that the law of his nationality is English law. The respective rights of the plaintiff and the defendant in the Spanish property depend upon whether the succession to that property falls to be determined according to the domestic law of England or of Spain.

If English domestic law applies, the defendant will take the Spanish property absolutely; if Spanish domestic law applies, the plaintiff will be entitled to a compulsory portion (legitimas) of two thirds of the Spanish property, the defendant taking only the remaining one third.

The case is therefore concerned with problems of private international law and in particular with the doctrine of renvoi.

Before explaining the problem, I will define the terms which I am going to use. I will use the words “domestic law” to mean the internal law of the country as it would apply if the Testator had died domiciled in, and was a national of, the country in which the property in question was locally situated i.e. so as to exclude the private international law rules of that country. I will use the words “the whole law” to mean the domestic law and the private international law of that country.

There is no dispute before me as to the relevant law of England. The Testator having died domiciled here, the Will takes effect in accordance with the whole law of England. Under the rules of private international law, the succession to the Spanish property is determined by the lex situs meaning the whole law of Spain; I therefore have to decide the case in exactly the same way as it would be decided by the Supreme Court of Spain. The English law has been so stated in a number of cases at first instance, in particular re Ross (1930) 1 Ch 377 and re Duke of Wellington (1947) Ch 506. The law as so established at first instance raises certain conceptual and practical difficulties (see Dicey and Morris on Conflict of Laws, 10th Edition p.69) in a higher court.

I have therefore to determine what is the whole law of Spain which a Spanish judge would apply. Under Article 9.8 of the preliminary title to the Spanish Civil Code, succession to all property, whether movable or immovable and whether situate is determined by the law of the deceased’s nationality i.e. in this case English law. The question is whether he would apply English domestic law only (in which case the defendant alone would be entitled) or the whole of English law, in which case English law would again remit the matter to Spanish law. It appears to be common ground between the experts that if the Spanish Court applies the whole of English law then on the further remission by English law to Spanish law the Spanish judge would apply Spanish domestic law only (i.e. the plaintiff would get his two thirds portion). On the face of it, the question of Spanish law which I have to decide is exactly the same as that which, with manifest reluctance, Wynn Parry K. decided in the Duke of Wellington case. He decided that the Spanish Supreme Court would hold that the succession to immovable property in Spain of an English national would be determined in accordance with English law i.e. Spanish law did not recognise a doctrine of renvoi. But since the decision in the Duke of Wellington case, the Spanish Civil Code has been substantially amended so that, for the first time, it deals specifically with the question whether, under the rules of


UK Court judgement


Spanish private international law, the doctrine of renvoi is to be applied. As will appear, such new specific provision in the Code is itself very obscure and there is no decision of the Supreme Court of Spain (the only binding decision in Spanish law) or any other court since the new provision was made. I therefore approach the task of stating what is the present law of Spain in this difficult field with at leas as much reluctance and diffidence as did Wynn Parr J...

On the expert evidence the starting point is that prior to 1974 it was an undecided question of Spanish law whether the doctrine of renvoi was applicable to succession: there were conflicting decisions in the lower courts but none in the Supreme Court.

It was in those circumstances that the Law of Bases was passed. This law is what we could call an enabling Act, under which the government could by decree amend the Preliminary Title to the Spanish Civil Code in accordance with seven “bases” or guidelines. In relation to the rules of Private International Law, it provided as follows:

“hereditary succession shall be governed by the national law of the deceased at the time of his death, regardless of the country in which the assets are situated.”

It also provided expressly in terms of what subsequently became Article 12.2 which I will set out hereafter.

The authorised amendments to the Preliminary Title were made by a Decree dated 31 May 1974. The Amended Preliminary Title is divided into chapters, Chapter 4 is headed “Rules of Private International Law” and contains a series of articles (numbers 8-11) setting out the principles of Spanish Private International Law as they apply to various classes of problem.

The scope of article 9 is set out in article 9.1 as follows:

“The personal law of natural persons shall be that determined by their nationality. The said law shall govern capacity and civil status, family rights and duties and succession by reason of death.” (23)

Succession is specifically dealt with by article 9.8 as follows:

“8. Succession by reason of death shall be governed by the national law of the de cujus at the time of his death, irrespective of the nature of the assets. However, testamentary dispositions and succession covenants which conform to the national law of the testator or covenantor at the time at which they are made shall continue to be valid even if the succession is governed by another law, although the compulsory portions, if any, shall be governed by the latter law.”

There is no dispute that under article 9.8 the succession to the Spanish property falls to be determined by English law, being the law of the Testator’s nationality. The question is whether article 9.8, in referring to English law, is referring to the domestic law of England or the whole law of England.

Article 12 contains certain general principles to be applied in giving effect to the Spanish rules of Private International Law. The crucial provision is article 12.2 which provides:

“2. Reference to a foreign law shall be deemed to be a reference to the substantive law, the exclusion of any renvoi by the conflict rules thereof to a law other than Spanish law.”

It is common ground between the experts that the words ”substantive law” mean the domestic law of a country as opposed to the whole law of that country.

The dispute between the experts is as to the way in which the Spanish Supreme Court would apply article 12.2. Señor Barrero (the Defendant’s expert in Spanish law) emphasises the illogicality inherent in article 12.2 He points out that the first part of article 12.2, by making the Spanish Court refer to the domestic law of the foreign country, logically excludes any possibility of the doctrine of renvoi arising since such doctrine cannot form part of the domestic law of the foreign country. Yet the second part of article 12.2 plainly envisages that a limited renvoi may apply i.e. the laws of the foreign country may remit the matter to Spanish law and the Spanish court may in certain circumstances accept such remission. Señor Barrero’s view is that under Spanish Law the Court, although entitled to decide to accept such remission, is not bound to do so; when the matter comes before the Spanish Supreme Court in his view it will decide whether it would be in accordance with the general principles of Spanish Law to accept the remission by the foreign law back to Spanish law. The, says Señor Barrero, the acceptance by a Spanish Court in cases of succession to property of an English national would offend the basic concept of unity of succession fundamental in Spanish Law.

The concept of unity of succession is that enshrined in article 9.8 i.e. one law (the national law of the deceased) shall govern the succession to all property of a deceased person irrespective of the nature or situation of the property in question. By adopting this concept, Spanish law seeks to avoid the frustration of a Testator’s wishes inherent in allowing different laws to regulate the succession to different parts of his estate, thereby failing to give effect to the Testator’s express or presumed intentions. So, says Señor Barrero, in a case such as this the Spanish Supreme Court, not being bound by article 12.2 to hold that the doctrine of renvoi should apply, would give effect to the basic concept of unity of succession by reference to the law of the nationality and hold that the succession was regulated by the domestic law of England.

The Plaintiff’s expert. Señor Abando does not agree. He accepts that there is a basic illogicality in article 12.2 but considers that its effect is to require the Spanish Supreme Court to apply the doctrine of renvoi whenever the foreign law remits the matter for decision to Spanish law. He finds support for his opinion in the views of a Spanish Jurist, Señor Santonja, who certainly treats article 12.2 as requiring the Spanish Court to accept the remission from English law. He also considers that the principle of unity of succession is not absolute and points to cases where the law regulating the capacity of the Testator, the inherent validity of the Will and rights of succession under the Will are all different.

I am faced with the difficult task of choosing between these conflicting views in seeking to determine how the Spanish Supreme Court would decide the point. I must try to bear in mind that the drafting of the Spanish Civil Code and the method by which the Spanish Court would apply such code differ fundamentally from the drafting and principles of construction applicable to an English statute. As I understand the evidence. the Spanish court seeks to find the law first by applying the written law (if it is mandatory and clear), next by giving effect to the unwritten law (i.e. decisions of the Supreme Court and the opinions of eminent jurists) and finally by giving effect to the general principles of Spanish law (such as for example, the concept of unity of succession).



Spain Court judgement

Denny - vs - Denny (widow)A SPANGLISH will written by a Spanish Abogado – and notarised - making the gift of the whole estate to his wife – is not actually lawful under Spanish internal law. The children of the testator were therefore able to overturn this ‘irregular’ form of will in favour of themselves – stripping the widow of two thirds of her inheritance from her husband.

BackgroundAnthony Denney was an Englishman who had lived in Spain for many years. He died in 1990 and his Spanish will (i.e. Spanglish) made his second wife Celia Mercedes Royde-Smith the sole legatee, without prejudice to the rights that the children of his first marriage might have under his national – i.e. UK law.

BUT – was the notarised Spanglish will valid. Were his children entitled to inherit part of the estate as obligatory heirs under Spanish Law?

When put to this type of ultimate courtroom test notarised Spanglish wills – of the type written in Spain for English speaking people – by Spanish Abogados – can fail.

If this will had been written under UK law it could not fail (i.e. Adams vs. Adams (widow) above).

HIS EXCELLENCY THE JUDGEOF THE COURT OF FIRST INSTANCE OF

JEREZ DE LOS CABALLEROSISSUED THIS DECISION ON 30TH JANUARY 1995,

RULING AS FOLLOWS:Partly allowing the claim filed by the counsel for MR TIMOTHY JOHN DENNEY AND MS SARAH PETICA KIRTZ AND MS TERESA FRANCES ANDERSON (the three children claiming the estate that their father had given in his Spanglish will to his wife/widow) against MS CELIA MERCEDES ROYDE SMITH and DON LUIS MONTERO VARGAS ZUÑIGA (the widow and the named executor) and by virtue of the above:

I DECLARE that the succession resulting from the death of Mr John Anthony Denney is governed by Spanish law and that as a result of this the plaintiffs as children of the deceased are legitimate in competing with Ms Royde-Smith in the succession of Mr Denney deceased and therefore are entitled to a third of the latter’s inheritance in full rights and to the joint rights of the third for betterment, rights of use and enjoyment of same belonging to the widow, who also owns the third of the estate disposable at will.


Looking first at article 12.2, both experts are agreed that it is confusing and illogical. It seems to me clear that the basic approach of the article is to exclude the doctrine of renvoi since the reference is initially to the domestic law of the foreign country. I do not read the latter part of ………accept a renvoi to Spanish Law. At most, it authorises such acceptance. All that is clearly prohibited by article 12.2 is the transmission of the question to yet a third system of law i.e. if Spanish law applies English law and English law would apply the law of France, article 12.2 prohibits the Spanish court from applying the law of France. I am fortified in this view by the fact that article 12 contains general rules applicable to all cases where questions of Private International Law may arise not merely to cases of succession. I feel it improbable that the Code was intended to fetter the Supreme Court so as to require it to adopt the doctrine of renvoi in all the different types of case in which it might arise.

Next. as to the unwritten law. As I have said, there are no decisions on the effect of the provisions of article 12.2 by the Spanish courts at any level. As to the views of Señor Santonja, he certainly regards article 12.2 as requiring the succession to the immovable property in Spain of an English national to be regulated by the domestic law of Spain. But, so far as I can see, he simply assumes this to be the effect of article 12.2 without explaining why he olds that view.

Finally, as to the general principles of Spanish law both experts agree that unity of succession according to the law of nationality is a basic principle of Spanish law. To apply Spanish law to the immovable property in Spain of a foreign national would run contrary to such a principle. I cannot accept Señor Abando’s attempts to limit the scope of such principle. He has demonstrated that a different system of law may apply to testamentary capacity or inherent validity on the one hand from that which applies to succession on the other. But he has not referred me to a single example of a case where Spanish law has applied anything other than one system of domestic law to the succession to all property comprised in one estate. For a Spanish court to hold in this case that Spanish domestic law applied to the Testator’s immovable property in Spain but that English domestic law applied to the Testator’s movable property in defiance of the Testator’s explicit wishes would run counter to this basic principle.

Since in my judgment there is no mandatory requirement in article 12.2 binding the Spanish Court to apply the doctrine of renvoi and accept remission from the English law, in my judgment it would decide the question so as to give effect to the basic concept of unity of succession. For that reason, although with great hesitation and difficulty….the Spanish Supreme Court if it were seized of this case would hold that the Testator’s Spanish property devolves in accordance with English domestic law i.e. to the Defendant absolutely free from any claim by the Plaintiff under Spanish law to a portion.

I accordingly dismiss the action.

ConclusionThe Adams children FAILED to overturn the ‘Quill Style’ Will - on the basis of Spanish testementary law.


As a consequence the partition and award made in favour of the defendant of the Castle site in Salvatierra de los Barros as well as the subsequent legalisation is null and void. As soon as this resolution becomes definitive an order is to be issued in duplicate to the Land Registry of this city ordering it to proceed to cancel the entry relating to the aforementioned property effected in favour of Ms Royde.

I discharge the defendants of the rest of the claims made against them and require the provisions of ground sixteen of this resolution to be immediately enforced.

Each party will pay the costs occasioned by its petition and will pay the joint costs at half each”

The Denney CaseWhen an Englishman dies domiciled in Spain: does Spanish Law or English Law govern the succession to his estate?

Anthony Denney was an Englishman who had lived in Spain for many years.

He died in 1990 and his Spanish will made his second wife Celia Mercedes Royde-Smith universal legatee, without prejudice to the rights that the children of his first marriage might have under his national law.

The question was, were his children entitled to inherit part of the estate as obligatory heirs under Spanish Law?

It took nine years - and a lot of money - to find out the answer.

Anthony Denney’s three children by his first marriage challenged the widow’s claim to the estate in the Spanish Courts, claiming that under Spanish Law part belonged to them.

Their grounds were that because English Private International Law refers to the law of Spain and Article 12.2 of the Spanish Civil Code accepted the renvoi, or reference back from English Law, therefore Spanish Law gave them compulsory rights to a part of the estate. However, Article 12.2 of the Civil Code is ambiguous and there were no judgments from the Supreme Court to provide guidance on how it should be interpreted.

The widow denied that the children had any right to bring their inheritance claim before the Spanish Courts

1. The Barrister D. Alejandro Pérez Montes Gil, in the name of and representing Mr Timothy John Denney, Ms Sarah Petica Kirtz and Ms Teresa Frances Anderson brought a suit for a major claim before the Court of First Instance of Jerez de los Caballeros, against Ms Mercedes Royde Smith and don Luis Vargaz-Zuñiga, in which after putting forward the facts and points of law he considered to be applicable, he concluded by asking the Court to issue a decision stating as follows:

1. That the succession of Mr John Anthony Denney must be governed by Spanish law.

2. That in accordance with the same, the plaintiffs - as children of the predecessor in title - have the capacity of legitimate heirs competing with the surviving spouse.

3. That as a consequence they must be acknowledged in the partition of the shares in the legal inheritance.

4. That the deeds of partition executed between the executor Sr Montero Vargas Zuñiga and Royde Smith, as well as the awards made to the latter by means of a public document certified on 22nd October 1990 by the Almendralejo

Notary Don Tomás Agustín Martínez Fernández are null and void.

5. That the registration made in favour of Ms Celia Mercedes Royde Smith in the Land Registry of Jerez de los Caballeros pursuant to which she is awarded the full title to the estate registered under no. 3.176-N is null and void. Likewise he asks for the defendants to be ordered to accept the statements made above, as well as to pay the costs arising from the proceedings.

With leave having been given for the action to go ahead and the defendants having been summonsed to appear, the Barrister Da Reyes Palencia Pérez appeared in person in the proceedings, in the name of and representing Ms Celia-Mercedes Royde Smith and D. Luis-maría Montero Vargas-Zuñiga, and tendered a plea and after invoking the facts and legal grounds she considered to be applicable, ended by petitioning the Court to issue a ruling rejecting the claim, without going into the merits of the case, if it accepted some of the procedural objections invoked; or on the other hand, if the merits of the issue being raised were gone into for it to discharge them from all the petitions submitted, and for the plaintiffs in any event to be ordered to pay costs.

Having examined the evidence declared to be pertinent to the proceedings, his Excellency the Judge of the Court of First Instance of Jerez de los Caballeros, issued a decision on 30th January 1995, RULING as follows:

“Partly allowing the claim filed by the counsel for MR TIMOTHY JOHN DENNEY AND MS SARAH PETICA KIRTZ AND MS TERESA FRANCES ANDERSON against MS CELIA MERCEDES ROYDE SMITH and DON LUIS MONTERO VARGAS ZUÑIGA and by virtue of the above:

I DECLARE that the succession resulting from the death of Mr John Anthony Denney is governed by Spanish law and that as a result of this the plaintiffs as children of the deceased are legitimate in competing with Ms Royde-Smith in the succession of Mr Denney deceased and therefore are entitled to a third of the latter’s inheritance in full rights and to the joint rights of the third for betterment , rights of use and enjoyment of same belonging to the widow, who also owns the third of the estate disposable at will.

As a consequence the partition and award made in favour of the defendant of the Castle site in Salvatierra de los Barros as well as the subsequent legalisation is null and void. As soon as this resolution becomes definitive an order is to be issued in duplicate to the Land Registry of this city ordering it to proceed to cancel the entry relating to the aforementioned property effected in favour of Ms Royde.

I discharge the defendants of the rest of the claims made against them and require the provisions of ground sixteen of this resolution to be immediately enforced. Each party will pay the costs occasioned by its petition and will pay the joint costs at half each”

A happy endingMrs Denney fortunately had patience and a lot of money - and did not die before the matter could be appealed – by reference to Adams v Adams (widow) – and she could recover her property.

ConclusionDo not write a ‘Spanglish’ will!



The States signatory to the present Convention,

Desiring to establish common provisions on the conflicts of laws relating to the form of testamentary dispositions,

Have resolved to conclude a Convention to this effect and have agreed upon the following provisions:

Article 1A testamentary disposition shall be valid as regards form if its form complies with the internal law:

a) of the place where the testator made it, or

b) of a nationality possessed by the testator, either at the time when he made the disposition, or at the time of his death, or

c) of a place in which the testator had his domicile either at the time when he made the disposition, or at the time of his death, or

d) of the place in which the testator had his habitual residence either at the time when he made the disposition, or at the time of his death, or

e) so far as immovables are concerned, of the place where they are situated.

For the purposes of the present Convention, if a national law consists of a non-unified system, the law to be applied shall be determined by the rules in force in that system and, failing any such rules, by the most real connexion which the testator had with any one of the various laws within that system.

The determination of whether or not the testator had his domicile in a particular place shall be governed by the law of that place.

Article 2Article 1 shall apply to testamentary dispositions revoking an earlier testamentary disposition.

The revocation shall also be valid as regards form if it complies with any one of the laws according to the terms of which, under Article 1, the testamentary disposition that has been revoked was valid.

Article 3The present Convention shall not affect any existing or future rules of law in Contracting States which recognize testamentary dispositions made in compliance with the formal requirements of a law other than a law referred to in the preceding Articles.

Article 4The present Convention shall also apply to the form of testamentary dispositions made by two or more persons in one document.

Article 5For the purposes of the present Convention, any provision of law which limits the permitted forms of testamentary dispositions by reference to the age, nationality or other personal conditions of the testator, shall be deemed to pertain to matters of form. The same rule shall apply to the qualifications that must be possessed by witnesses required for the validity of a testamentary disposition.

Article 6The application of the rules of conflicts laid down in the present Convention shall be independent of any requirement of reciprocity.

The Convention shall be applied even if the nationality of the persons involved or the law to be applied by virtue of the foregoing Articles is not that of a Contracting State.

Article 7The application of any of the laws declared applicable by the present Convention may be refused only when it is manifestly contrary to “ordre public”.

Article 8The present Convention shall be applied in all cases where the testator dies after its entry into force.

Article 9Each Contracting State may reserve the right, in derogation of the third paragraph of Article 1, to determine in accordance with the lex fori the place where the testator had his domicile.


Convention On The Conflicts Of LawsRelating To The Form Of Testamentary Dispositions

Concluded 5 October 1961 | Entered into force 5 January 1964

Article 1A testamentary disposition shall be valid as regards form if its form 1 complies with the internal law:

a) of the place where the testator made it, or

b) of a nationality possessed by the testator, either at the time when he made the disposition, or at the time of his death, or

c) of a place in which the testator had his domicile either at the time when he made the disposition, or at the time of his death, or

d) of the place in which the testator had his habitual residence either at the time when he made the disposition, or at the time of his death, or

e) so far as immovables are concerned, of the place where they are situated.

For the purposes of the present Convention, if a national law consists of a non-unified system, the law to be applied shall be determined by the rules in force in that system and, failing any such rules, by the most real connexion which the testator had with any one of the various laws within that system.

The determination of whether or not the testator had his domicile in a particular place shall be governed by the law of that place.

1 - meaning in the ‘format’ of the relevant wills act or law

2 - meaning a will under the Spanish law of obligatory disposition or UK/Eire law as applicable

3 - meaning a UK/Eire will

4 - almost inevitably meaning a UK/Eire will

5 - if 3 can be got around meaning 5

6 - meaning a will under the Spanish law of obligatory disposition

2

3

4

5

6


Article 10Each Contracting State may reserve the right not to recognize testamentary dispositions made orally, save in exceptional circumstances, by one of its nationals possessing no other nationality.

Article 11Each Contracting State may reserve the right not to recognize, by virtue of provisions of its own law relating thereto, forms of testamentary dispositions made abroad when the following conditions are fulfilled:

a) the testamentary disposition is valid as to form by reason only of a law solely applicable because of the place where the testator made his disposition,

b) the testator possessed the nationality of the State making the reservation,

c) the testator was domiciled in the said State or had his habitual residence there, and

d) the testator died in a State other than that in which he had made his disposition.

This reservation shall be effective only as to the property situated in the State making the reservation.

Article 12Each Contracting State may reserve the right to exclude from the application of the present Convention any testamentary clauses which, under its law, do not relate to matters of succession.

Article 13Each Contracting State may reserve the right, in derogation of Article 8, to apply the present Convention only to testamentary dispositions made after its entry into force.

Article 14The present Convention shall be open for signature by the States represented at the Ninth Session of the Hague Conference on Private International Law.

It shall be ratified, and the instruments of ratification shall be deposited with the Ministry of Foreign Affairs of the Netherlands.

Article 15The present Convention shall enter into force on the sixtieth day after the deposit of the third instrument of ratification referred to in the second paragraph of Article 14.

The Convention shall enter into force for each signatory State which ratifies subsequently on the sixtieth day after the deposit of its instrument of ratification.

Article 16Any State not represented at the Ninth Session of the Hague Conference on Private International Law may accede to the present Convention after it has entered into force in accordance with the first paragraph of Article 15. The instrument of accession shall be deposited with the Ministry of Foreign Affairs of the Netherlands.

The Convention shall enter into force for a State acceding to it on the sixtieth day after the deposit of its instrument of accession.

Article 17Any State may, at the time of signature, ratification or accession, declare that the present Convention shall extend to all the territories for the international relations of which it is responsible, or to one or more of them. Such a declaration shall take effect on the date of entry into force of the Convention for the State concerned.

At any time thereafter, such extensions shall be notified to the Ministry of Foreign Affairs of the Netherlands.

The Convention shall enter into force for the territories mentioned in such an extension on the sixtieth day after the notification referred to in the preceding paragraph.

Article 18Any State may, not later than the moment of its ratification or accession, make one or more of the reservations mentioned in Articles 9, 10, 11, 12 and 13 of the present Convention. No other reservation shall be permitted.

Each Contracting State may also, when notifying an extension of the Convention in accordance with Article 17, make one or more of the said reservations, with its effect limited to all or some of the territories mentioned in the extension.

Each Contracting State may at any time withdraw a reservation it has made. Such a withdrawal shall be notified to the Ministry of Foreign Affairs of the Netherlands.

Such a reservation shall cease to have effect on the sixtieth day after the notification referred to in the preceding paragraph.

Article 19The present Convention shall remain in force for five years from the date of its entry into force in accordance with the first paragraph of Article 15, even for States which have ratified it or acceded to it subsequently.

If there has been no denunciation, it shall be renewed tacitly every five years.

Any denunciation shall be notified to the Ministry of Foreign Affairs of the Netherlands at least six months before the end of the five year period.

It may be limited to certain of the territories to which the Convention applies.

The denunciation will only have effect as regards the State which has notified it. The Convention shall remain in force for the other Contracting States.

Article 20The Ministry of Foreign Affairs of the Netherlands shall give notice to the States referred to in Article 14, and to the States which have acceded in accordance with Article 16, of the following:

a) the signatures and ratifications referred to in Article 14;

b) the date on which the present Convention enters into force in accordance with the first paragraph of Article 15;

c) the accessions referred to in Article 16 and the date on which they take effect;

d) the extensions referred to in Article 17 and the date on which they take effect;

e) the reservations and withdrawals referred to in Article 18;

f) the denunciation referred to in the third paragraph of Article 19.

In witness whereof the undersigned, being duly authorised thereto, have signed the present Convention.

Done at The Hague the 5th October 1961, in French and in English, the French text prevailing in case of divergence between the two texts, in a single copy which shall be deposited in the archives of the Government of the Netherlands, and of which a certified copy shall be sent, through the diplomatic channel, to each of the States represented at the Ninth Session of the Hague Conference on Private International Law.



Article 9 of the Spanish Civil CodeChapter IVNorms of private international rights (23)

1. Penal laws, police laws and civil protection laws apply to each and every person who is located within Spanish territory.

The personal law of natural persons shall be that determined by their nationality. The said law shall govern capacity and civil status, family rights and duties and succession by reason of death. (23).

The change of law applied to an individual person, will not affect the majority acquired in accordance with the previously mentioned law applicable to an individual.

2. The purposes of marriage will be governed by the common law of the spouses at the time of marrying, in default of this law, by either of the individual’s personal law, or the law applicable to the place of residence of either spouse, chosen by both, recorded by means of an authentic document granted prior to the marriage date. Should this not be the case, it would therefore be determined by the law applicable to conjugal place of residence immediately after the marriage celebration. Should this also not be the case, then it would be determined by law applied to the place in which the wedding was held.

The annulment, the separation and the divorce will be governed by the law which is determined by article 107 (24).

3. The pacts and agreements by which the financial regime of the marriage are stipulated, modified or substituted, will become valid as and when they are in accordance with the law that governs the purposes of the marriage, being either the law determined by nationality or the law determined by the common place of residence of either party at the time of being granted.

4. The nature and contents of the affiliation, including the adoptive and the paternal-filial relationships will be governed by the personal law applicable to the child, and should it be unable to determine, then the law applied to the child’s habitual place of residence will apply (23).

5. The adoption formed by a Spanish judge will govern, as far as requirements are concerned, as laid out in the Spanish Law (25). Nevertheless, the national law of the adopted person must be taken into account, as far as its capacity and necessary consent are concerned:

• If their main place of residence was not Spain.

• Even though they reside in Spain, if they do not acquire in virtue of the adoption, the Spanish nationality.

• By request of the adopting party, or the Fiscal Ministry, the Judge, in the interest of the adopted party, may demand also, the consents, court hearings, or authorizations required by national law or by the law applied to the main place of residence of either the adopting party or the adopted child.

• In order to form the adoption, the Spanish consuls will have the same powers as the Judge, as and when the adopting party is Spanish and the adopted child is domiciled within the consul demarcation. The preliminary proposal will be formed by the

public entity which corresponds to the last place of residency of the adopting party in Spain. If the adopting party did not have had reside in Spain during the past two years, a preliminary proposal will not be necessary, however the consul will apply to the authorities of the last place of residence of the adopting party, those reports sufficient enough the evaluate and determine their identity.

• In an adoption formed by a competent foreign authority, the law of the adopted party will govern as far as capacity and necessary consents are concerned. The mandatory consents required by law can be presented before a local authority in country in which the formation was initiated, or subsequently, before any other competent authority. In such case, for the adoption of a Spanish national, the consent of the public entity corresponding to the last place of resident in Spain of the adopted child is necessary.

• An adoption formed abroad by a Spanish adopting party will not be recognised in Spain, if the purposes of said adoption do not correspond with predicted by the Spanish legislation. Neither will it be recognised all the while that the competent public identity has not declared the identity of the adopting party, should this person be person be Spanish and was domiciled in Spain at the time the adoption took place.

• The attribution by a foreign law of a right to revoke an adoption will not prevent its recognition, should this right be renounced in a public document or by means of an appearance before a representative of the registry office (25).

6. The guardianship and other institutions that protect those incapable are regulated by their respective national law. However, provisional or urgent measures of protection are governed by the law of their place of residence.

The formalities involved in the constitution of the guardianship and other protective institutions in which judicial or Spanish administrative authorities intervene, will substantiate in all cases in accordance with Spanish law.

Spanish Law will apply to take protective and educational measures with respect to minors and abandoned incapacitates that are located within the Spanish territory.

7. The right to food benefits and between relatives must be regulated by the common national law of the person providing the benefits and the person receiving the benefits. However, the law applied is that of the place of residence of the claimer. When this cannot be obtained, then it will be in accordance with common national




law. Defaulting both laws and when neither law permits the obtainment of food, the internal law of the authority aware of the reclamation will apply.

Should there be a change of nationality, or a change of main place of residence of the claimer, the new law will apply as soon as the change occurs.

8. Succession as a consequence of death is governed by the national law of the deceased at the time of death, whatever be the nature of the assets and property and the country in which they find themselves. However the dispositions made in their last will and testament and any successive pacts ordered in agreement with the national law of the testator at the time of being granted will conserve their validity, even though it is another law that governs the inheritance.

The rights which are attributed to the surviving spouse by ministry are governed by the same laws as which regulate the purposes of the marriage, maintaining always the legitimate rights of the descendants (26).

9. With respect to situations and cases of dual nationality forecasted within the Spanish laws, it shall be as determined by international agreements and if nothing was established, the preference will be the nationality coinciding with the last place of residence, failing this, the location of the most recent acquired property (27).

In any case, the Spanish nationality will prevail in he or she who holds another, not foreseen in our laws or in international agreements. If the person holds two or more nationalities and none of which are Spanish, then it shall be as detailed within the following paragraph.

10. In the case where an individual lacks a determined nationality or, whose nationality is not determined, the law applied to their place of residence will apply (28).

11. The individual law of judicial people is that determined by their own nationality and it will govern in all relating to capacity, constitution, representation, functioning, transformation, dissolution and extinction.

When the fusion of companies of different nationalities occurs, the individual’s personal and respective laws will be taken in to account.



1976 UK - Spain Double Taxation AgreementThe following extracts are taken from the UK Revenue site, which may assist your broader reading, and of other areas of the treaty.

DT17550 - Particular agreements: Spain: Agreement

The comprehensive agreement (SI 1976/1919) has effect

a) In the United Kingdom for i) Income Tax from 1976-77, ii) Capital Gains Tax from 1976-77, iii) Corporation Tax from 1 April 1976.

b) In Spain from 1 January 1976.

An Exchange of Notes concerning the taxation of time share rights (SI 1995/765 has effect from 1 January 1992. See DT17553.

DT17552 - Particular agreements: Spain: Source of income

For the purposes of the credit Article (Elimination of double taxation), profits, income and capital gains owned by a United Kingdom resident which may be taxed in Spain under the provisions of the agreement are deemed to be income or gains from sources in Spain (Article 24(4)).

Interest and royalties are deemed to arise in the country of which the payer is a resident.

DT17601 - DT: Spain: double taxation agreement, Article 2: Taxes covered

(1) The taxes which are the subject of this Convention are: (a) in the United Kingdom of Great Britain and Northern

Ireland:(i) the income tax; (ii) the corporation tax; and (iii) the capital gains tax;

(hereinafter referred to as Ùnited Kingdom tax`);

(b) in Spain:

(i) the general income tax on individuals (el impuesto general sobre la Renta de las personas f isicas);

(ii) the general corporation tax (el impuesto general sobre la Renta de Sociedades y demas entidades juridicas);

(iii) the following prepayments: the tax on rural land, the tax on urban land, the tax on earned income, the tax on income from capital, the tax on business and industrial activities (los siguientes impuestos a cuenta: la Contribucion Territorial sobre la Riqueza Rustica y Pecuaria, la Contribucion Territorial sobre la Riqueza Urbana, el impuesto sobre los Rendimientos del Trabajo Personal, el impuesto sobre las Rentas del Capital y el impuesto sobre Actividades y beneficios comerciales e industriales);

(iv) In Sahara, the income taxes on earned income and on income from capital and the taxes on profits of the enterprises (en Sahara, los impuestos sobre la renta sobre los rendimientos del trabajo y del patrimonio y sobre los beneficios de las empresas);

(v) The `surface royalty` and the tax on corporation profits, regulated by the Law of 27 June 1974

applicable to enterprises engaged in prospecting and exploiting oil wells (el Canon de superficie y el impuesto sobre los beneficios, regulados por la Ley de 27 de Junio de 1974 aplicable a las empresas que se dedican a la investigacion y explotacion de hidrocarburos);and

(vi) the local taxes on income and capital (los impuestos locales sobre la renta y el partimonio); (hereinafter referred to as `Spanish tax`).

(2) This Convention shall also apply to any identical or substantially similar taxes which are imposed by either Contracting State after the date of signature of this Convention in addition to, or in place of, the existing taxes. At the end of each year, the competent authorities of the Contracting States shall notify to each other any changes which have been made in their respective taxation laws.

DT17602 - DT: Spain: double taxation agreement, Article 3: General definitions

(1) In this Convention, unless the context otherwise requires:

(a) the term Ùnited Kingdom` means Great Britain and Northern Ireland including any area outside the territorial sea of the United Kingdom which in accordance with international law has been or may hereafter be designated under the laws of the United Kingdom concerning the Continental Shelf, as an area within which the rights of the United Kingdom with respect to the sea bed and sub-soil and their natural resources may be exercised;

(b) the term ̀ Spain` means the Spanish State and, when used in a geographical sense, Peninsular Spain, the Balearic and Canary Islands, and the Spanish towns and territories in Africa, including any area outside the territorial sea of Spain which in accordance with international law has been or may hereafter be designated, under the laws of Spain concerning the Continental Shelf, as an area within which the rights of Spain with respect to the sea bed and subsoil and their natural resources may be exercised;

(c) the term `national` means:

(i) in relation to the United Kingdom, any citizen of the United Kingdom and Colonies who derives his status as such from his connection with the United Kingdom and any legal person, association or other entity deriving its status as such from the law in force in the United Kingdom;

(ii) in relation to Spain, any individual possessing the nationality of Spain and any legal person, partnership or association deriving its status as such from the law in force in Spain;

(d) the term ìnternational traffic` means any transport by a ship or aircraft operated by an enterprise of a Contracting State, except when the ship or aircraft is operated solely between places in the other Contracting State;

(e) the terms ̀ a Contracting State` and ̀ the other Contracting State` mean the United Kingdom or Spain as the context requires;

(f) the term `person` comprises an individual, a company and any other body of persons;

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(g) the term `company` means any body corporate or any entity which is treated as a body corporate for tax purposes;

(h) the terms ènterprise of a Contracting State` and ènterprise of the other Contracting State` mean respectively an enterprise carried on by a resident of a Contracting State and an enterprise carried on by a resident of the other Contracting State;

(i) the term `competent authority` means, in the case of the United Kingdom the Commissioners of Inland Revenue or their authorised representative and, in the case of Spain, the Minister of Finance, the Technical General Secretary or any other authority to whom the Minister delegates.

(2) As regards the application of this Convention by a Contracting State any term not otherwise defined shall, unless the context otherwise requires, have the meaning which it has under the laws of that Contracting State relating to the taxes which are the subject of this Convention.

DT17605 - DT: Spain: double taxation agreement, Article 6: Income from immovable property

(1) Income from immovable property including income from agriculture or forestry may be taxed in the Contracting State in which such property is situated.

(2) The term ìmmovable property` shall be defined in accordance with the law of the Contracting State in which the property in question is situated. The term shall in any case include property accessory to immovable property, livestock and equipment used in agriculture and forestry, rights to which the provisions of general law respecting landed property apply, usufruct of immovable property and rights to variable or fixed payments as consideration for the working of, or the right to work, mineral deposits, sources and other natural resources; ships, boats and aircraft shall not be regarded as immovable property.

(3) The provisions of paragraph (1) of this Article shall apply to income derived from the direct use, letting, or use in any other form of immovable property.

(4) The provisions of paragraphs (1) and (3) of this Article shall also apply to the income from immovable property of an enterprise and to income from immovable property used for the performance of professional services.

DT17606 - DT: Spain: double taxation agreement, Article 7: Business profits

(1) The profits of an enterprise of a Contracting State shall be taxable only in that Contracting State unless the enterprise carries on business in the other Contracting State through a permanent establishment situated therein. If the enterprise carries on business as aforesaid, the profits of the enterprise may be taxed in the other Contracting State but only so much of them as is attributable to that permanent establishment.

(2) Subject to the provisions of paragraph (3) of this Article, where an enterprise of a Contracting State carries on business in the other Contracting State through a permanent establishment situated therein, there shall in each Contracting State be attributed to that permanent establishment the profits which it might be expected to make if it were a distinct and separate enterprise engaged in the same or similar activities under the same or similar

conditions and dealing wholly independently with the enterprise of which it is a permanent establishment.

(3) In the determination of the profits of a permanent establishment, there shall be allowed as deductions expenses which are incurred for the purposes of the permanent establishment (including executive and general administrative expenses so incurred) whether in the Contracting State in which the permanent establishment is situated or elsewhere.

(4) No profits shall be attributed to a permanent establishment by reason of the mere purchase by that permanent establishment of goods or merchandise for the enterprise.

(5) For the purposes of the preceding paragraphs, the profits to be attributed to the permanent establishment shall be determined by the same method year by year unless there is good and sufficient reason to the contrary.

(6) Where profits include items of income which are dealt with separately in other Articles of this Convention, then the provisions of those Articles shall not be affected by the provisions of this Article.

DT17612 - DT: Spain: double taxation agreement, Article 13: Capital gains

(1) Capital gains from the alienation of immovable property, as defined in paragraph (2) of Article 6, may be taxed in the Contracting State in which such property is situated.

(2) Capital gains from the alienation of movable property forming part of the business property of a permanent establishment which an enterprise of a Contracting State has in the other Contracting State or of movable property pertaining to a fixed base available to a resident of a Contracting State in the other Contracting State for the purpose of performing professional services, including such gains from the alienation of such a permanent establishment (alone or together with the whole enterprise) or of such a fixed base, may be taxed in the other State.

(3) Notwithstanding the provisions of paragraph (2) of this Article, capital gains derived by a resident of a Contracting State from the alienation of ships and aircraft operated in international traffic and movable property pertaining to the operation of such ships and aircraft shall be taxable only in that Contracting State.

(4) Capital gains from the alienation of any property other than those mentioned in paragraphs (1), (2) and (3) of this Article shall be taxable only in the Contracting State of which the alienator is a resident.

DT17617 - DT: Spain: double taxation agreement, Article 18: Pensions and annuities

(1) Subject to the provisions of Article 19 pensions and other similar remuneration paid in consideration of past employment to a resident of a Contracting State and any annuity paid to such a resident shall be taxable only in that State.

(2) The term ànnuity` means a stated sum payable periodically at stated times during life or during a specified or ascertainable period of time under an obligation to make the payments in return for adequate and full consideration in money or money’s worth.



1. The Quill Group is a United Kingdom business - formed - and first registered - by Simon Harris - in December 1986.

2. The formation of Shelter structures is organised by The Quill Group Company Secretary LLP - from its UK offices - assisted in the UK by The Quill Group Treasurer LLP - and in Spain by Quill’s willwriting abogado and fiscal advisors.

3. Ongoing maintenance services - of making annual returns etc. - are provided by The Quill Group S.L. (CIF B-35918119), from its offices in Spain with help from its abogado and fiscal advisors and The Quill Group Company Secretary LLP (OC315295) and The Quill Group Treasurer LLP (OC315396) in the UK.

4. QUILL WILLS IN SPAIN is a business name owned and operated by Quill Holdings LLP (OC317007) registered in England and Wales, Harbro House, Crown Lane, Denbigh, Denbighshire, LL16 3SY.

Why would anybody advise a foreign person – like you - to write such a crucial document as their Last Will and Testament – in the Spanish language and law – that they do not understand:

When - any arguments - that events in the future might cause to be held – would then have to be held in a Spanish court – with a Spanish judge - in the Spanish language – (and are thus) likely to be completely incomprehendable (as well as expensive and difficult to attend) to the beneficiaries and descendants of the testator

When it is perfectly normal and lawful - in Spain – (and around the world) - to write a Will covering assets you own in Spain in your own language and law

When the law governing succession (i.e. Wills) for foreigners in Spain is not - in any event -that of Spain - but of their homeland

When any arguments that might occur in the future – could – instead - be held in the English language - in a UK or Eire court in front of a UK or Eire judge IF a better form of Will is written

When all of the major recent judgments from courts have proved ‘Spanglish’ Wills to be capable of ‘exploding’ – when the major judgments from courts have guaranteed that Spanish Asset Wills (UK, Eire etc) - will be upheld

When writing a Spanglish Will in many circumstances will automatically cost the testator around £100,000 (UK) €100,000 (Eire) in additional homeland taxation

Could it be that these ‘leading’ island lawyers do not understand the relevant international, UK and Eire, and Spanish law – OR - have they simply become accustomed to the income they can derive from writing Wills (that may not work at all – and will almost always lead to greater taxes) for unsuspecting English speaking foreigners?

WHY WOULD YOU?A comment - for those who have read the Lanzarote Gazette, February ‘07 edition, local lawyers advertorial

Documents

QWSpanish Assets wills_book-v1.26,31C07