If you live in the U.S.A. , Australia or any other Non E.U. country (this is extremely important for U.K. citizens after Brexit ) you can now in my opinion claim the application of the regional government exemptions (applicable in the region where the majority of value of the assets are situated ) on inheritance tax. You must make sure your Spanish inheritance attorney claims them on the deed and the self assessment forms.
The wonderful tax exemptions available to residents in Andalucia and some other regions of Spain (each autonomous region has there own set of exemptions )when they inherit from spouse or parent where extended thanks to a sentence by the E.C.J. (European Court of Justice ) to any resident of the E.U inheriting assets in Andalucia and those other regions because Spain was told they could not discriminate residents of E.U. countries.
This was fantastic news as it happened to coincide with the increase in exemptions in Andalucia which this year is now 1.000.000 euro tax free and a 99% reduction on the rest as long as you are inheriting from your spouse or parent.
Well, this year we have some more good news . Our supreme court has decided on two independent cases (creating therefore precedent ) that this is now to be extended also to residents in third countries who inherit in Spain. I will not bore you with the detailed reasons given by the Supreme court for this but the consequence is clear. If you inherit from your Spouse or parent and you are a resident of Andalucia or a non-residen of Spain living in any other country that inherits in Andalucía then you will pay no tax if you receive less then 1000000 euro and almost nothing if you inherit more. For other regions please contact us.
Be very careful though as in Spain the inheritance tax return is done by self assessment . If your solicitor does not claim this is the case on the tax forms and pays, getting it back will be a very big challenge. We recommend detailing the sentences etc on the inheritance deed announcing that you will not pay tax because of them.
These sentences have come just in time . Brexit would have meant in practice English heirs living in the U.K. paying a lot of tax when inheriting their parents villa down on the sunny beaches of Andalucia. Not anymore.
Remember the Andalucía exemptions (1000.000 euro tax free and 99% reduction on the final tax bill on amounts above) if you inherit from your spouse or parent as long as you are a resident in Andalucía or are a non resident of Andalucía inheriting assets in Andalucía. They would not be applicable if you the beneficiary reside in another region of Span. In this case we would need to look at the exemptions in that particular region.
If you are a resident in a different region of Spain called to inherit or a non-resident inheriting a property in a different region of Spain e-mail us for the latest position in that region.
Not claiming the correct exemptions you are entitled to is one of the 7 pitfalls of not using a specialised Spanish inheritance solicitor
In case I have not said so before: “Andalucía is one of the most fantastic places to live in the world”. Go and explore.
