IHT a query

Camposol, where was the change in the Murcia tax announced? According to the Olive Press, Murcia is included in the nil succession tax for spouses which also includes the Balearics, Madrid, Valencia, the Canaries and Catalonia. A company called fuster (sorry, can't do a link from my tablet) has a calculator for IHT in Murcia and with assets let than 402, 000 and a property worth less than 250, 000 ( That's the figure I put in) the IHT is nil for spouses and children.
Both the above references are dated this month so either they haven't updated or this IHT applies to a different category.
(Actually the allowance is 99% as they can't abolish national tax rules but can change the level)
Not saying you're wrong, just that I can't find any references to the change and, as we have friends in the Murcia area, we were thinking of a possible move there in the future. This type of legislation could change our plans.

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It was in "Murcia today" online

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Continued-it was in Murcia Today-20/0713

The changes took place on July 8 th.

Google Murcia Today

in keyword type: important changes to tax rates applied to property purchases.

This message was last edited by camposol on 28/08/2013.

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I have read the article and here is the link.

http://www.murciatoday.com/important-changes-to-tax-rates-applied-to-property-purchases_17961-a.html

The confusion is about the "fee" to be paid. It does not say the tax. Perhaps Interlaw can clarify

Saludos

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Best I stay this side of the border, then. I do agree with you that taxes such as this should set nationally. Fine having road tax, council tax etc set locally as this is worked out on the local conditions. Things like IVA, IHT, income tax etc should be the same throughout. I do disagree that this has been done to hit the expats and I am pretty sure there's no "star chamber" that sits and discusses how to rip off the foreigners (much as those who think bars and restaurants have one price for locals and one for the rest - it's all the same menu).
The population of the Murcia region is about 1.5 million with foreigners about 175, 000. That makes rather a large majority of people affected by these changes Spanish.
A bit worrying, though, that if Murcia has done this then could the others be far behind?

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Please could someone explain the following two options:

 

Leaving it to children is very disadvantageous to the remaining spouse, who may have many years left, and will probably want to go back to UK or downsize-they need the money.

Investing the house into a UK company seems to be favourite at the moment, but who on earth should have to go to those lengths.

 

thanks

kerry

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bobaol-Apparently, Murcia is not the only region to have done this!

Kerryb- some think that if you leave the assets to several family members instead of the spouse alone, there will be less tax to pay as they all have an individual allowance to  use against the IHT bill. That means that the spouse will not have sufficient money to buy another house or move-it takes away control of what should have been hers.

Investing the house into a UK companymeans there is no IHT to pay. as it belongs to the company, not one individual.It sounds a complicated solution as there are costs involved.It would be so much simpler if there was a decent state allowance.

 

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I had the following response from my solicitor in Spain

'Regarding the inheritance tax, if the property is site in Spain your beneficiary has to submit the tax in Spain, independently if you are resident or not.

Also, the tax resident of the beneficiary is important, because if is resident there is a reduction of 99 % of the tax (in case of parents to sons).

The tax for assets site in other countries will be declared in the country where is located.

Nevertheless, the current situation could change in the future.'

It appears to say if you pass the property to your child which if resident will pay virtually no tax

regards

Kerry

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It appears to relate to the costs incurred only Not the actual 99% tax relief. Even Blevin Franks are still stating the 99%.relief.

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It's very poorly worded. The 99% relief was abolished with effect from 11th July in Murcia, except for Group 1

".On the Inheritance and Gift Tax, amending existing deduction system eliminating the deduction for taxpayers included in group II Article 20.2) of Law 29/1987, of 18 December , the Inheritance and Gift Tax. Instead, it maintains the deduction of 99% applicable to taxable persons included in group I, that is, descendants and adopted under twenty years.

There is still a national allowance in respect of property for spouses etc of €122,606, where there is relief of 95%, providing te property is kept for 10 years.

"The same percentage reduction to the limit of 122,606.47 euros for each taxpayer and to stay requirement stated above, shall acquisitions "mortis causa" of the residence of the deceased, provided that the beneficiaries are the spouse, ancestors or descendants of the former, or collateral relative more than sixty-five who had lived with the deceased for two years before death."






This message was last edited by Kathyslad on 30/08/2013.

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Thanks

 

I thought based on previous posts the allowance in murcia had been reduced to 16,000 euros?

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€15956.87 is the standard national allowance to be offset against any assets, and is available to residents and non-residents. The national allowance I quoted is for property only, and is for beneficiaries who reside at the property (although the EU has asked Spain to review this, as they feel it discriminates against non-residents, which of course it does).

This message was last edited by Kathyslad on 30/08/2013.
This message was last edited by Kathyslad on 30/08/2013.

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During 2012 and 2013, in Murcia, if you are a heir and are  an ascendant or descendant ( or adopted) over 21 years old, spouse or adopter, you will have the 99% deduction on the quota JUST IF:

  Value of your inheritance portion is not higher that 300.000 euros.

If you are disabled in a 65% level or more level is at 450.000€ euros

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Is there any difference between resident and non resident for both remaining spouse and children over 21?

This message was last edited by KERRYB on 31/08/2013.

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Maria-what is the situation re allowances for IHT in 2014
 

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