Receiving an inheritance lump sum can bring a lot of mixed emotions. It can be satisfying – even exhilarating – to suddenly get more money in your account. However, an inheritance can also be a painful reminder of the loved one you have lost. It is not always easy to make rational decisions at a time of high emotions. Therefore, it helps to be ready with an inheritance “contingency plan” – where you decide, ahead of time, how you might use a lump sum if it ever arrives.
If you are a British expat living in Spain and you suddenly receive an inheritance from a loved one back home, what happens? Do you pay UK inheritance tax (IHT), Spanish IHT or both?