Spanish Inheritance Tax

You're nuts both of you!

By the way Smiley you've 'enlarged' - are you the first 'finca'?

Hi all,

Has anyone any advice on inheiritance tax issues for single people? I am in that group of people and have found that singles seem to lose out on lots of financial issues.

Julia

Hi all,

I actually deal with IHT solutions for non resident and resident property owners in Spain through my work. It's a bit of an ever changing problem at the moment and each individual case is unique. If anyone is concerned about IHT i'd be happy to explain in more detail what I do and if I can't help point them in the direction of people who maybe able to.

Cheers

Jonathan

I recently had a flyer pushed through the door from www.propertyoverseas.uk.com & I was amazed by the info it had on the back of it to make buying in Spain more attractive. It said "No inheritance tax for Valencian property owners which includes South Costa Blanca" & I knew this wasn't correct according to Maria de Castro, our resident lawyer on EOS. So I decided to email them, see .........

There is only one solution to the IHT problem that is to transfer the property in to a UK registered limited Company. You can do this for about 5K plus 1% of the value of the property , in my case it  would save my wife 24000€ tax and 5000€ probate costs and 2 years anguish ,it would cost me the same if she goes first ,then my 2 children would have to probate individually at the same tax and cost each when we are both gone .As it is you are all worrying about what will happen and mine is all being dealt with in my UK estate ,and as my company rents the property for JUNE,JULY and August it is classed as a trading company and will be exempt from IHT in the UK ,I also get tax relief on all my property and traveling expenses ,so my loan account keeps rising and one day i or others can receive it out tax free, the chancellor also helped on the last budge by letting me stay in my Spanish home without any benefit in kind tax from April 2008 so everything is great ,There are lots of other options as well you can gift your loan account to your inheritors without them kn owing ,you can appoint then as directors so they can deal with your asset ,if you are ill ,you can give them share options so that they can take control of the company if you are not capable ,or you can  gift so much per year of your loan account tax free  but still keep control of the asset you can sell the company with the property for 10% less than everybody else by selling the shares ,this means no Lawyers no Notary and no Spanish transfer tax

There are Companies that you can find on google who will help you do this

Its a no brainer

Thanks malcroach, that's very interesting stuff - will look further into it.

More................you should tell those lying plebs at www.propertyoverseas.uk.com that ALICANTE is in the VALENCIA region.  It ends in the south where the district of Pilar de la Horadada, borders the MURCIA region.  MURCIA is NOT part of VALENCIA.   With twits like that spreading mis-information no wonder agents get a bad name.  Glad you named and shamed.

Hi ********

These agents will often stop at nothing to get you on their trips. By saying what they did on their flyers they should be chastised lots.

We are confused enough without all of that.

Name & shame, you're so right.

In the Valencian Community, the 99% reduction in succession tax applies only to resident beneficiaries who are the spouse, or direct line descendants and ascendants i.e. natural or adopted children, grandchildren, great grandchildren, parents, grandparents and great grandparents etc. Each beneficiary has a personal ‘Valencian’ allowance of €40,000 plus an extra €5,000 for each year they are under 21 up to a maximum of €60,000. The deceased has to have been habitually resident in the Valencian Community at the time of death.

The 99% reduction in Valencian succession tax also applies to inheritances and lifetime gifts received by any person who is physically disabled (65% or more) or mentally disabled (33% or more). There is no specific mention of residency here so the standard rules that rely on the residence status of the donor and beneficiary will apply in deciding whether the basic State or improved Valencian rules will apply.

Otherwise, lifetime gifts to resident children and parents, but not spouses, whose existing wealth is below €2 million can be relieved, subject to a limit of €420,000 per beneficiary. All gifts from the same donor during the five years immediately beforehand are taken into account. Again, the beneficiaries must be habitually resident in the Valencian Community at the time the gift was made.

The 99% relief does not apply sequentially on the same assets or equivalent value within ten years of either the current donor receiving a 99% relieved gift, or the current donee having made a 99% relieved gift to someone else.

The Valencian Community is not the only autonomous region to introduce a 99% reduction in succession tax for close relatives.

There has also been a possible 100% exemption of succession tax in Andalucia if the wealth of the deceased is no more than €500,000, providing a) the recipient is a close relative (i.e. spouse or direct line recipient), and b) the taxable value of the inheritance received is no more than €125,000, and c) the wealth of the recipient is no more than €402,678. This relief can also apply if the deceased’s wealth is more than €500,000, provided conditions a) and c) are fulfilled.

Iv'e heard you can invest your Spanish homeinto a UK limited company as well as saving on potential Inheritance Tax you can save on Capital gains tax.

Jake