Spanish Inheritance Tax (IHT) rules differ considerably from other countries (esp. the UK). Without proper planning, you could be faced with paying many thousands of Euros in tax when, on the death of one of you, the survivor inherits the other's half of the property. Your children will be faced with paying IHT again when they eventually inherit. Tax must be paid within six months of death and the property cannot be changed into the names of the inheritors (or sold) until the tax is paid.

On a property of €500,000, jointly owned and with two children eventually inheriting, the tax on the first death could be as much as €38,875 with a further €77,750 due when the children inherit. That's a total of €116,625 and where someone inherits from a person to whom they are not related, the tax is doubled.

We strongly suggest that you contact a Money management group or consultant to see what you can do to help reduce or avoid these costs.