inheritance tax

I know this is not a new subject, and i know the idea of selling your appartment to a uk /spanish company, and taking out life insurance to cover the cost.......all cost a lot of money depending on age.

I was reading the other day about not declaring liability for inheritance tax for 5.5 years, and you then have no tax to pay.  Is this true,  don't the authorites find out if your spouce has died, nb reduction in IBI TAX if only one of you.

Has any one ever carried this out.  

In the Uk and France no inheritance tax is due between spouce's, is there a EU ruling on this or is this another thing Spain does differently, i don't see why the state should profit from your loss when you have just lost your life time partner.

It's a very complex issue, not least because it actually varies from one part of Spain to another. For example in Andalucia there is an exemption between spouses - I don't know about other regions, or even if the exemption applies to non-residents. The period after which tax cannot be claimed I thought was 10 years, but again, it probably varies from one region to another anyway, so you really are best seeking professional advice. Whatever the limitation, you'd be taking a risk - if found out, you'd be liable to pay the tax, interest and likely a fine too.

IBI tax is levied by the local council on the property, I'm not aware of any reductions based on number of occupants. Again, individual municipalities may have their own rules.

Hi Roberto  I hope I don't sound thick but do you mean that in Andalucia when one spouse dies the other automatically inherits the property and does not have to pay the tax.  Also I read that Spanish nationals don't have to pay this tax, so this is surely another discrimination against us expats and must be against the EU rules.

Many thanks Kathy

Hi ... I speak from experience of having had to complete the paperwork and pay the tax!!

Andalucia ... for residents and that includes spaniards born & bred there is an exemption between spouses on the marital home.

It is 99.9% of the inherited amount after the deduction of the 15.956,87 euro allowance but only UPTO a limit of 122,606,47 euro.

The value of the property is the official value .... ie the catastral value multiplied by a 'coeficiente' published by the government.

For me in Mijas Costa that was 2.0

This tax is 'self-assessment' and the authorities then have 4 years in which to challange the amount you have declared and paid.

It is best to pay for the services of a lawyer/gestoria that specialises in this type of taxation ... they know all the nooks and crannies in the law and should be able to make a stressful time a little easier.

DO NOT forget that there has to be a spanish will directing who should inherit the assets .... NO WILL means forced inheritance takes place.......... ie ... wife will not necessarily get the house/money/dog etc

For non-residents I THINK (but not certain) there are no allowances or exemptions

There are areas in Spain where the Inheritance tax is at 0% ... so effectively nothing to pay - perhaps we should all move there!

PS I understand that the period after which inheritance tax cannot be claimed by the authorites is 6 years....BUT!!

thanks everyone for your replies, and sorry to here of your loss "spiritof spain".

we have been waying up the pros and cons of france against spain ... i gather in france you don't pay inheritance tax between spouce's .... i may be wrong and stand corrected.     Has anyone owned in france and then moved to spain....

1962, I think spiritofspain has probably answered your question for me, but just to clarify, as far as I am aware, the rules governing taxes generally apply to residents versus non-residents, rather than Spanish citizens versus non-Spanish, so there is no discrimination in the sense you suggest. If non-residents are taxed differently on property matters, it is because the property in question is, by definition, not your principle residence. Capital gains tax for example is now the same for residents and non-residents, on any second home.

If you think there is discrimination then complain to Brussels.  They are looking into inheritance tax generally at my instigation, but I am not familiar with the Andalucian provisions.