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Inheritance Tax DeductionsIn Andalucía
This presentation has been updated and is valid for 2014.
Inheritance Law in Andalucía
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There are special regional tax deductions and exemptions
passed by the local government in Andalucía that only apply
to those beneficiaries who have been resident in the region.
Inheritance Law in Andalucía
3
If you have NOT been resident in the Andalucía region then,
when determining your inheritance tax liability, you may only
apply the deductions and exemptions approved by the
CENTRAL government.
Inheritance Law in Andalucía
4
The central government exemptions and deductions are not
as generous as the regional exemptions.
This has caused complaints that the inheritance tax laws in
Spain are discriminatory against non-residents.
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Inheritance Law in Andalucía
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The regional level exemptions available in Andalucía were
enacted by the Seville parliament and in their current form
are specified in Legislative Decree1/2009.
The most important changes to state succession laws may
be summarised as follows:
Inheritance Tax Law in Andalucía
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Spanish Inheritance law first assigns beneficiaries to groups according to the degree of kinship with the deceased:
Group I Children, including adopted children, under the age of 21
Group II All other descendants, spouses and parents
Group III Close relatives such as brothers and sisters, grandparents,
aunts and uncles
Group IV More distant relatives
Personal Deductions
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The following are the personal exemptions available in Andalucía:
Group Deduction
Group I A 100% exemption where the estate is valued at less than €175,000 and the pre-existing wealth of the
beneficiary is less than €402,678.11
Group II A 100% exemption where the estate is valued at less than €175,000 and the pre-existing wealth of the
beneficiary is less than €402,678.11
Group III State Level Deduction only: €7.993
Group IV No deductions available
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If the beneficiary is disabled > 33%:
There is an exemption of 100% for an inheritance where
the taxable value of the inheritance is less than or equal to
€250,000 (for inheritances after June 2010)
If the beneficiary is in Group III or IV then their pre-existing
wealth should not be more than €402,678
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Inheritance of the Family Home:
Where a property is inherited being the family home
then a reduction amounting to 99.99% may be made
The beneficiary should be the spouse or child of the
deceased
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Inheritance of the Family Home Cntd...
• Elderly relatives who were living with the deceased for
a period of two years prior to the death may also
benefit
• The property may not be sold for a period of 10 years
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Deductions in transfer of Family Business
Tax deduction of 99% of the value of the business
May be children, spouse or any relative 'to third
degree of sanguinity' who may benefit from the
deduction
Must maintain business for a period of no less than 5
years
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Deductions on income from Life Insurance:
A deduction of up to €175,000 may be made on inheritance of
money from a life insurance policy
Any descendent, parent or spouse with less than €402,678 in
personal wealth may benefit from this deduction
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Other Deductions:
As a general rule the following deductions may be made on any estate:
Funeral Expenses
Final Medical Expenses of the Deceased
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Other Deductions Cntd:
Debts held be the deceased that are evidenced by public
documents e.g. a mortgage
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Once the final amount of tax payable is determined then it is necessary to apply the relevant rate:
Tax Rates in Andalucía
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Tax Rates in Andalucía
Taxable Sum
Tax Payable On This Sum
Any Remainder Up To Applicable Rate on Remainder (%)
0 0 7993,46 7,65
7993,46 611,5 7987,45 8,5
15980,91 1290,43 7987,45 9,35
23968,36 2037,26 7987,45 10,2
31955,81 2851,98 7987,45 11,05
39943,26 3734,59 7987,46 11,9
47930,72 4685,1 7987,45 12,75
55918,17 5703,5 7987,45 13,6
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Tax Rates in Andalucía
Taxable Sum
Tax Payable On This Sum
Any Remainder Up To
Applicable Rate on Remainder (%)
63905,62 6789,79 7987,45 14,45
71893,07 7943,98 7987,45 15,3
79880,52 9166,06 39877,15 16,15
119757,67 15606,22 39877,16 18,7
159634,83 23063,25 79754,3 21,25
239389,13 40011,04 159388,41 25,5
398777,54 80655,08 398777,54 31,75
797555,08 199291,4 And Above 36,50
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Existing Wealth
Once the relevant tax rate has been applied the result is multiplied by a coefficient determined by the existing wealth of the beneficiary as well as the group to which they belong:
Existing Wealth Groups
(In Euros) I & II III IV
0 to 390,657 1 1.5882 2
390,657 to 1,965,309 1.05 1.6676 2.1
1,965,309 to 3,936,629 1.1 1.7471 2.2
More than 3,936,629 1.2 1.9059 2.4
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Existing Wealth
The Groups referred to consist of the following beneficiaries:
Group I Children, including adopted children, under the age of 21
Group II All other descendants, spouses and parents
Group III Close relatives such as brothers and sisters, grandparents,
aunts and uncles
Group IV More distant relatives
Each year in Spain thousands of expats pay more
tax on inheritance than they should – simply
because they fail to follow some simple rules.
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To find out how to get expert advice, in English, about how to
reduce your liability for inheritance tax, go to:
Expert Probate Services in Andalucia
Expert Probate Services in Andalucia
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