More – inheritance tax allowances
At the start of 2018 the region had massively increased the inheritance tax allowance for a spouse, child, parent or grandchild of a deceased person to 1,000,000€ per beneficiary. This means someone with a spouse and three children could leave an estate of up to four million to them completely free of inheritance tax. In April 2019, this allowance was made even more generous in that the taxable base for any amount over 1,000,000€ is now reduced by 99% before applying the tax which virtually eliminates inheritance tax between the relatives mentioned above.
Donation tax allowances
Another great new development is that the allowances have been expanded to include lifetime donations. Spouses and direct descendants can now benefit from a tax exemption of up to 99% on Donation tax as set out in the new law published on April 9th 2019. For many years we have had to tell clients that it was not advisable to donate property as inheritance tax was subject to greater reductions. However, the Decree Law 1/2109 has seen a move to give incentives to those who wish to gift their property to their children or spouse during their lifetime.
There are an increasing number of property owners who purchased their property in the region of Andalucia many years ago. Possibly some of them are no longer able to, or keen to, travel and they would like their children to own the property. Now they can take advantage of this exemption.
In Spain inheritance and donation taxes are donee taxes are payable the person who receives the gift, not by the estate. These exemptions and reductions are very beneficial and do contact us if you would like to make arrangements to donate your property or review your wills and property ownership in Spain. Some other regions of Spain have higher or different rates and this is where there could be important changes in the future.
A number of economists and financial experts believe there may well be a move by the new Socialist government to bring greater harmony of tax rates for donations and inheritance tax between the regions. It is also possible they will look to fix national rates rather than leaving the regions to choose their own rates and incentives.
It could therefore be beneficial to make a gift now whilst the allowances are so generous.
For more information and a professional and personal service tailored to your particular circumstances contact us now on +34 951 315 161 or email on [email protected]