Inheritance Tax “Sucesiones”
In Spain the obligation to pay inheritance tax begins at death.
The percentage of inheritance tax payable depends on:
Value of the estate including the net value of all assets of any kind such as property.
Bank accounts, investments, cars, boats, jewellery, works of art etc. that belonged to the deceased 1 year before death.
Amount of the inheritance.
Existing wealth of the heir(s) when the inheritance was received.
There is a 3% increase for chattels
Properties are valued by the Inland Revenue according to their cadastral or rateable value “Valor catastral”
The Rates Office assign a rateable value to each home or property according to the value of land on which is built, based on the building values established by each municipality.
The rateable value and the reference number “referencia catastral” appear on the bank voucher confirming payment of town hall rates demands by direct debit.
Rateable values may be adjusted by coefficients in the annual state budget.
Inheritance tax is between 7.65% and 34% of the value of the estate after certain tax-free amounts are deducted.
Under Spanish legislation the closer the heir(s) is/are to the deceased, the less inheritance tax is paid.
The Relationship Groups are as follows:
Children, grandchildren and adopted children under
Spouse, children, adopted children over 21, ascendants (parents, grandparents etc.) and adopted parents.
Brothers, sisters, uncles, aunts, nephews, nieces, parents-in-law and sons/daughters-in-law.
Relatives of 4th or more collateral degree and unrelated persons.
The tax-free amounts of the estate are published in each annual state budget.
Once the inheritance tax is calculated, the amount will be subject to a coefficient depending on kinship between the deceased and the heirs and their pre-existing wealth.
Statute of limitation
Four years and six months after death, there is no inheritance tax to pay i.e. if the tax authorities do not make a claim for inheritance tax within four years of a death plus six months payment period.
If the tax authorities have made a claim and if the payment of inheritance tax does not take place during the voluntary six month payment period and is paid afterwards, there are certain surcharges for late payment.
up to 3 months 5%
up to 6 months 10%
up to 12 months 15%
more than 12 months 20% plus interest
An extension can be obtained providing the following information:
Identification of the deceased
Date and place of death
Identification and address/es of heir/s
Situation and approximate value of assets and rights
Reason for extension application
The value of the house is reduced by 95% if it was the deceased’s habitual home and the heir/s is/are the spouse, children, adopted children, parents or a collateral relative over 65 years who had lived with the deceased for at least two years prior to death. The maximum reduction is set out in the annual state budget.
The heir/s must undertake not to sell the property for the next ten years. If this requisite is not met, the full tax will be payable plus interest.
Beneficiaries of life insurance policies may deduct 10% (with a certain limit) of the payment received, providing the relationships between the deceased and the beneficiary/ies is/are that of spouse, ascendant, descendant, adoptive or adopted.
If the insurance was taken out before 19.01.1987, an extension of a certain amount is applied in the case of the above relationships and a reduction made of the remaining 90%
It may be necessary to make part payment of tax to receive payment of a life insurance policy or funds held in a deceased’s bank account.
A formal written request in duplicate must be made providing the following information:
Assets to which partial payments apply
Name of the person or organisation paying or handing over assets
Title proving applicant’s right.
Form Model 650 is used to pay inheritance tax.
Documents to be taken to the Notary’s Office are as follows:
Copy of the will
Certificate of the Last Will and Testament “Certificacion de Ultimas Voluntades” from the “Registro de Ultimas Voluntades” Madrid
Whilst great care has been taken to maintain a high standard of accurate and reliable information Viva-Malaga cannot accept liability for any errors or omission. Information supplied by FreshStart Advice Centre.