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El blog de Maria

Your daily Spanish Law reporter. Have it with a cafe con leche.

Legal 1438. No IHT in Andalucia from 2018, January 1st
24 September 2017

From January 1, Andalucía will cease to tax the heirs who receive property of a deceased family member when the sum of the assets does not exceed one million euros. Family members enjoying this benefit need to belong to  groups I and II.

Group I:  Children and adopted children under 21 years old.

Group II: Children and adopted children of 21 years old or older, grandchildren, parents, grandparents, spouses, unmarried partners registered as a Pareja de Hecho (only in certain regions)

It is necessary to take into account that the million euros computes by heir.

Does the heir´s previous patrimony compute?

Yes. In order to benefit from the exemption it is necessary that the heirs do not have a previous patrimony, at the moment of receiving the goods,  of over one million euros. At present, the estate of the heir can not exceed 402,678.11 euros.

Who will continue to pay the tax?

The maximum tax bonus leaves out groups III and IV.

Group III: Other relatives of 2nd and 3rd grade, in-law relatives. Stepchildren, cousins, nieces and nephews, aunts and uncles, siblings, and in-laws and their ascendants/descendants.

Group IV: Other further grade relatives. No reduction is applied to these cases. All others including unmarried partners, unless registered as Pareja de Hecho in certain regions

The Junta de Andalucía establishes a reduction of 7,993.46 euros in general and another of 95% in the case of the habitual residence inherited between brothers over 65 years. No more.

How does reform affect donations?

In Andalusia the donations are more expensive than the inheritances, among other reasons because the autonomic norm contemplates less reductions in the quota of the inheritance tax and donations. The Government of Andalusia establishes a 99% exemption in the donations of money from the parents to their children or descendants that is destined entirely to the purchase of the first habitual residence, as long as the grantee is under 35 years old or has a handicap equal to or greater than 33%.

The rencet  agreement by Citizens and PSOE introduces a change when the destiny of the donation is to create a company or to extend it. Again the barrier of the million euros is established. Donations between direct relatives (parents and children) up to this amount are not taxable provided that the full amount of the donations is intended to constitute or expand an individual company or family business. The small print contains a multitude of conditions: the donation must be formalized in a deed and the company must be maintained during the five years following the date of the public deed of donation, unless the grantee dies within that period.

What other groups improve their situation?

The disabled. Existing reductions are increased. For taxpayers with disabilities, the great news is that it corrects the jumping error that was when the goods exceeded 250,000 euros exempt in the case of brothers, uncles and nephews. With the current rule, when the inheritance you receive is 300,000 euros, you had to pay the tax in full amount. From 2018 disabled brothers and nephews will liquidate the tribute for everything that exceeds 250,000 euros. In the example above, would pay the tribute for 50,000 euros.

What about inheritances that have already been paid?

The measure is not retroactive and does not affect liquidations that are already being processed and are submitted before 1 January. It is one of the complaints of the Association “Stop Tax Successions” that has spearheaded the rebellion against the tribute and calls for its total elimination. This Andalusian platform has ensured that "they will not buy our silence with rebates and shod" and maintains the protest scheduled on October 7 in Seville.

Seville: on the left, the "Torre del Oro" and, on background, the Cathedral.

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Legal tip 1437. European Court on multi-currency loans
21 September 2017

New pro-consumer Decission by the Court of Justice of the European Union. Dated 20th of September 2017. It decided on a case of a mortgage loan with a multi-currency clause.

The yesterday passed text affirms that when a financial institution grants a loan denominated in foreign currency, it must provide the borrower with sufficient information so that the borrower can make informed and prudent decisions.

Spain  Supreme Court  is also passing a decission these days on the  abusiveness of such clauses.

In the European Court case, borrowers stated that at the time of signing the contracts the bank presented its product in a misleading manner, highlighting only the benefits that borrowers could obtain without showing their potential risks or the likelihood that they would be materialize. Borrowers asked the clause at issue to be declared abusive.

In this context, the Higher Court of Oradea, Romania asked the European Court about the scope of the obligation for banks to inform their clients of exchange rate risk linked to loans denominated in foreign currency .
In that regard, the Court observes that the requirement that a contractual term must be drafted in a clear and comprehensible manner also requires that the contract provides a transparent statement of the actual operation of the mechanism to which the clause in question relates. Where appropriate, the contract must also indicate the relationship between that mechanism and that prescribed by other clauses, so that the consumer is in a position to assess, on the basis of precise and intelligible criteria, the economic consequences which result for him.

It is for the national court to ascertain whether all the elements which may affect the scope of its undertaking have been communicated to the consumer, enabling it to assess the total cost of its loan.

Merino sheeps and Grazalema in the background

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Legal tip 1436. Timesharers freed by Spain Supreme Court
11 September 2017

2017 has been a very productive year for the Spanish Supreme Court in relation to Timeshare and Consumer Law.

22 Court decisions so far, which by applying Law 42/98 to timeshare agreements, have produced important statements such as:

  1. Law 42/98 established an obligatory legal form for the setup of these contracts, that if infringed, makes the contract null and void and gives the consumer the right to obtain a refund of amounts. This form must be in a Notary deed, with subsequent registration at the Land Registry and containing full timeframes, cancellation rights, identification of turns etc.
  2. Law 42/98 applies, regardless the name of the contract, to any agreement by which money is paid for the enjoyment of property use for vacation weeks according to turns which have been previously acquired; where use is independent with enough furniture and accessory services; where payment is divided between an initial outstanding amount and posterior annual maintenance charges, with the possibility of withdrawing, resale and exchange.
  3. Consumer is who acquires these rights with no link to his professional or commercial activities. Profit can be made if that is obtained occasionally and unlinked to profession or commercial habitual activity.
  4. Lack of due information allows cancellation of the contract within three months from purchase date.
  5. If payments were made by a third party (agent, lawyer) they have same consideration as being made by consumer itself.
  6. Payments made within the desisting period needs to be reimbursed double fold.
  7. When nullity applies, refund is calculated in proportion to years not being enjoyed so far till 50 (legal maximum period)

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Legal tip 1435. Judges solutions against Banks when illegal properties
11 September 2017

Another great decision dated April 2017 by Alicante Provincial Appeal Court Section 9 in a case against CAIXABANK regarding solution to urban illegalities.

Law 57/1968 is applied to a case of urban illegality where the buyer had been living in the house for 9 years with no habitation license

The Alicante Provincial Appeal Court decision quotes Supreme Court doctrine which  established that delivery of the house according to provision 1461 y 1462 of the Civil Code includes full habitability conditions in an official way:  in short – habitation licences. (Supreme Court decisions dated September, 12th, 2016; April 22nd, 2015; September, 10th, 2012; November 8th, 2012; February 12th, 2013; March, 9th, 2016).

Nullity of the contract due to urban illegality is extended to the linked mortgage so, in these cases, a full claim of all amount paid, before and after completion, plus corresponding legal interests is possible.


Final note after some discussion with readers below ;) This is a decision by a provincial Appeal Court but Supreme Court has already passed a good number of  excellent decisions in this same matter

"Los Lances" beach, Tarifa, Cádiz, Costa de la Luz, South western Spain


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