Spain - British Expat Forum

Can any one help me?

I'm told that Spanish Inheritance Tax is awful, but there is a way round it something to do companies.

Any body got any ideas?

Last night I was told that you can transfer your Spanish Home into a UK Limited Company.

Edited by moderator

Hi jakey,
Welcome to the forum. Please have a read of our posting guidelines.

Regarding your question. Spanish IHT is bizarre to say the least.

If you have a lot of assets then yes, you can create a Spanish SL, assign all your children or inheritors as directors and distribute your assets that way.

Have a word with your local gestor, they should be able to point you in the right direction.

Thanks, Jakey

Hi! Inheritance tax here in Spain does not depend on the Spanish Gvmt., but on the regional governments (autonomous communities).

If you live in Comunidad Valenciana, as I guess, inheritance tax is almost free between parents and sons or couples (there is a tax deduction of 99 % !!!!!!!). I insist, this deduction is only applicable between parents and sons, or couples. No nephews etc. This means that 1 milion euros would pay around 3,000 euros. Not so bad after all!

This deduction is also applicable when giving money to your sons, BUT in this case the tax is due where the sons live! (in heritages, where the death person lived).

"Expensive regions" (those where 99% off is not applicable) are Catalonia, Andalousia and others. "Cheap regions" are Madrid, Majorca, Basque country and more to come.

Having a word with your local gestor is always a good idea. That is, if he hasn't driven crazy with all this legal issues! Best, Ricardito

When a non resident of Spain leaves or donates an estate which is located outside of Spain to a resident in Spain who lives in Madrid.

How will this tax be calcultated?

Thanks

Hi Billy,

a) If the property is donated, then no taxes are due in Spain, since the tax is paid where the property is located. (if it was money instead of an estate, then the tax is due, but not in this case).

b) If it is left in a last will, no taxes are due either, since the tax is paid where the death person lived (and it was not Spain in this case, right?).

In both cases, the new owner, resident in Spain shall include the value of this property, no matter where it is located, in his/her "impuesto sobre el patrimonio", a tax where yearly people pay between 0,2 and 0,5 % of the value of their properties....

I hope this is useful enough for you....

Thanks Ricpart for your fast reply.

However I'm confused. My understanding is that in the communidades with 99% bonification the rules are as follows:

Both parties have to be resident for the last 5 years in the communidades to be able to inherit almost taxfree. 1%

If the deceiced or the donnee is resident outside of Spain and the estate is outside of Spain then the taxes are calculated on a national basis given a 27% taxsetback on the estate.

In my opinion this is in violence with the EU rules. But because there so little cases no one has acted on this in the court of Luxemburg.

Most cases are involved with a foreign national with an estate in Spain.

Please advise.