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Spanish Inheritance Tax: How much is it?marbella-lawyers.com
Where spanish property, and generally, the estate of a person is transferred by inheritance, the Tax authorities charge as spanish inheritance tax (IHT) a percentage on the tax base according to a sliding scale where different considerations are taken into account. The same scale is applicable to donations, which is important insofar as this tax could be applied to a purchase/sale contract where the Tax Authority deems that the parties have underdeclared the price of the property on a Public deed of conveyance or, in some cases, private purchase contract.
Donees and inheritors are divided into four categories, depending on the relationship with the deceased, and allowances are conceded depending on the group.
Once the appropriate allowance has been deducted, the following tax rate is applied to the remainder: When the tax has been calculated , a multiplicand is applied to the figure, taking into account pre-existing wealth as well as relationship with the deceased. It has to be noted that Spain does not recognise the concept of partners or common law spouse when aplying inheritance tax. An inheritor who qualifies for the bottom of both scales and falls in group 4 will find the Tax Authority demands from him prior to registering the property under his name a monstrous percentage of 81.6 of the estate left. Fortunately, very few people qualify in such groups, and if they do, there are legitimate ways to get round the bite. A versed lawyer on inheritance matters will assist you in order to mitigate the exposure to this tax. Is a Spanish will necessary if I am a foreigner?A spanish will is not absolutely necessary althouth it is highly recommendable. The truth of the matter is that many people avoid drawing up such documents since death is not an issue at a certain period of life. However, any asset proprietor in Spain should arrange his post-death affairs in a neat way, inasmuch as the heirs would otherwise be involved in consuming and expensive legal procedures which would attract different legal jurisdictions. An experience not recommended by those who have experienced it. Furthermore, so far nobody has died from drawing up a simple will. If I have a foreigh will?A foreign will may cover your Spanish assets but again the procedure involves obtaining the probate of will in the jurisdiction of the will, legalisation, translation and a lot of legal assistance througout the procedure that most certainly will amount to a prohibitive legal fees bill. Where are spanish wills registered?A most widely used type of will is signed before a Notary Public, who keeps the original. A copy is then sent to a central registry of wills which is located in Madrid. This registry issues a certificate upon death of the testator with the contents of the will and is necessary in order to procure the transfer of the assets on to the inheritors. |
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