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INHERITANCE TAX

Alongside income tax “Renta”, inheritance tax in one of the most relevant fiscal tools in Spain. It’s legal state base for Non-residents is regulated by the LAW 29/1987 of the 18th of December, Developed by the “Real Decreto 1629/91”.

Inheritance tax rates will vary according to the location, In the Valencian Community the legal base is constituted by Law 13/1997 with multiple modifications, the last one being 10/2006.  This last modification affects individuals that have residence in the Valencian Community and meet the following conditions:

  • During the last five years the individual has presented tax returns in Spain.
  • The individual must be duly registered as a resident of the town where the individual lives.
  • The last domicile of the deceased being within the Valencian community

The following will be taxed as per the previously mentioned modification;

  1. All assets aquired by inheritance
  2. The acquisition of assests and rights by means of donation or other legal business,  totally free and between living individuals.
  3. Receiving funds from life insurance policies, when the beneficiary is not the same individual as the contractor.  

The taxable base shall be constituted by the following:

  1. “mortis causa” transmissions,  Individual aquiremient value of all assets in Spanish territory, for example, Property, bank accounts, cars, we must calculate the real value of these assets by discounting any mortgage, charges or liens we are also able to offset expenses such as funeral costs, medical treatment, inheritance court proceedings, etc…

 We must point out that personal effects from the home also account as hereditary mass and shall be taxed at 3%.

  1.  “inter vivos” transmissions, net value of assets and rights acquired, in other words, the real value of assets and rights less the deductible charges and expenses .

  3. Life insurance: Amounts received by the beneficiary. Any amount received as life insurance payment shall be summed to the hereditary mass  for taxation.

Taxable base

We obtain the taxable base by applying the reductions established by Law to the taxable base and depending on the level of family connections or affective relationship that the deceased had with the beneficiary.

Residents Scale

Taxable Base - Up to € Tax Payable - € Rest - Up to € Tax Rate Payable %

0.00

-

7,993.46

7.65

7,993.46

611.50

7,987.45

8.50

15,980.91

1,290.43

7,987.45

9.35

23,968.36

2,037.26

7,987.45

10.20

31,955.81

2,851.98

7,987.45

11.05

39,943.26

3,734.59

7,987.46

11.90

47,930.72

4,685.10

7,987.45

12.75

55,918.17
5,703.50

7,987.45

13.60

63,905.62

6,789.79

7,987.45

14.45

71,893.07

7,943.98

7,987.45

15.30

79,880.52

9,166.06

39,877.15

16.15

119,757.67

15,606.22

39,877.16

18.70

159,634.83

23,063.25
79,754.30
21.25
239,389.13
40,011.04
159,388.41
25.50
398,777.54
80,655.08
398,777.54
29.75
797,555.08
199,291.40
beyond
34.00

 

Tax Rates and quotas

In order to calculate the tax quota that needs to be put in to effect, we shall need to apply the percentage set by the corresponding autonomic community, or in defect, the percentage established in National Law.

Family Reductions

If the deceased and the heir live in the Valencian Community and are both fiscal residents they shall be able to take advantage of a 99% reduction on the quota, up to a limit of 420,000.00€ , in the case of “intervivos” put in to effect by parents, adopting parents, children or adopted children, a pre-existing patrimony of up to 2 million euros.  

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