On a sunny finca in Malaga, you and your partner sift through a case of old family heirlooms with your morning coffee. Some pieces are instantly dealt with, like the family holiday photo albums ready to digitise.
Yet, others – Grandpa’s tarnished pocket watch, handwritten letters from Mother, your silver christening spoon – make you pause and ponder. This simple act of sorting through belongings represents estate planning in its purest form: deciding what to keep, what to give, and what to let go.
More than paperwork, estate planning is knowing that your most cherished belongings and finances will live on. First, decide which possessions have real material value and may be worth selling if there aren’t obvious recipients for them. Antique porcelain dolls, silver-backed vanity sets, and hand-sewn quilts are amongst items which may be of surprising value if in good condition, as well as coins, jewellery, and rare vinyl.
Estate plans “must account for both UK inheritance tax law and the local succession or wealth tax rules in your country of residence” (Private Client Consultancy). In 2025, the UK switched to residency-based inheritance tax (IHT): a Long-Term Resident (LTR) will have been a UK tax resident for at least 10 of the past 20 years, and under the “tail” rule, will remain liable for IHT for 10 years after they left the UK. In addition, non-UK assets now fall within the range of IHT for LTRs. Fast forward to April 2027, and unused UK pensions will be included in an individual’s estate for IHT purposes.
These significant changes make it crucial for HNWIs with UK connections to review the impacts on their financial affairs and broader family succession plan. In contrast, Spain offers near-zero exemptions on succession tax in regions like Ceuta and the Canary Islands (www.movingtospain.com/spain-regional-tax-comparison/).
Did you know that Madrid offers 0% wealth tax? This exemption means that “moving assets out of the UK could potentially improve your tax liabilities for yourself and your heirs in the future” (Blevin Franks, ‘UK tax in 2025 and beyond: What British expatriates in Spain need to know’, www.blevinsfranks.com/uk-tax-in-2025-and-expats-in-spain/, 2025), though it’s still just as crucial to coordinate local wills due to forced-heirship rules.
Knowing that allocating assets to international investment accounts held on EU platforms can alleviate the tax burden for your heirs, and offer a useful tool for international expats to manage wealth. Furthermore, it’s worth investigating using trusts, such as a usufruct structure, to reduce succession tax on property.
As ever, good organisation and record-keeping contribute plentifully to the process: categorising collectables; keeping good records for stock and property investments; listing gifts with their dates – and importantly, having clear communication with family members.
It’s not unusual for retired expats to make generous gestures while living, choosing to shed complicated assets, consolidate pensions, or gift in the form of charitable donations or future education funds. These choices will minimise future tax exposure.
On further reflection, intentional gestures teach later generations the power of kindness, the necessity of financial independence, and the fulfilment of charity. This emotionally driven behaviour often loops back to real life. Families who inherit thoughtfully are better equipped to manage wealth responsibly, internalising values instead of simply inheriting assets.
Cross-border rules are undoubtedly intricate. A trusted local wealth advisor (ideally residing in your location) aligns your plan with both UK law and your country of residence, protecting your heirs from costly surprises.
Back on the terrace, you set aside the christening spoon. You decide that Grandpa’s ‘lucky’ gold watch will go to your eldest grandson; Mother’s letters to your youngest granddaughter, who likes to write, and that each grandchild shall receive a notable sum, accompanied by a handwritten note with your final wishes. Estate planning, then, is not only preparing for an end. It’s transferring the essence of who you are to the next generation.
