Inheritance and Gift Tax (for individuals) called ISD (Impuesto sobre Sucesiones y Donaciones)
Husband
& Wife and Spanish Inheritance Tax (ISD)
It
should be noted that there is no exemption to Spanish inheritance tax between a
husband and wife as there is in the UK.
If an unmarried own a property together, the tax due can be even more,
and anything over 15,956.87 will be taxed as kinship group IV, (i.e. double
that of a married couple). Nevertheless,
it is possible to register a relationship and be tax as a married couple,
similar to the Civil Partnership in the UK
Tax liability:
(Note
- inheritance tax is paid by the recipient)
- Spanish resident individuals are liable on receipt of any asset
wherever situated whether by death of donor or lifetime gift.
- Non-residents are liable on receipt of any asset situated in Spain.
Tax is payable: (by the recipient)
Within 6 months of death of the donor, or
within 30 days following the transfer of lifetime gift. There are some
provisions for deferred and scheduled payments in certain circumstances.
Assessment of tax:
The tax is assessed on the value of the
net amount received and accrues from the date of death, or the date of transfer
of the gift.
Tax payable:
The calculation of the tax payable is
dependent upon the net value of the transfer, the degree of kinship between
transferor and transferee, and the pre-existing net worth of the transferee.
Spanish
Inheritance Tax
Inheritance Tax
covers transmissions by gift and by death.
The tax is levied on the recipient and residents are subject to tax on
world-wide gifts and legacies. Tax is
due on the value of the assets at the date of the transmission, net of any
associated debts.
From 2004, in Andalusia, small inheritances
are exempt, primarily when the total estate is valued at less than 500.000 and
the individual inheritances are less than 125.000. This concession only applies to those who are
resident in Andalucνa and are close family members.
The amount of
the tax-exempt band depends upon the relationship to the donor. The limit for
spouses and children over 21 is 15,956.87, for example. The tax payable on the
balance is calculated in two stages. Firstly, calculate the 'basic tax
payable', in accordance with the following table:
Secondly,
a co-efficient is applied to the basic tax amount. The co-efficient depends
upon the relationship between the donor and the recipient and the pre-existing
net wealth of the recipient, according to the following table:
Pre-existing
net wealth Kinship
group*
-
Euros I
& II III IV
0 to 402,678.11 1,0000 1,5882 2,0000
402,678.11
to 2,007,380.43 1,0500 1,6676 2,1000
2,007,380.43
to 4,020,770.98 1,1000 1,7471 2,2000
Over
4,020,770.98 1 ,2000 1,9059 2,4000
*Kinship groups:
I: direct descendants under 21; II: direct descendants over 21, spouse, direct
ascendants; III: relatives to 3rd line, such as
brothers, uncles and nephews; IV: all others.
Information relating to financial and taxation issues was compiled by Michael
Jarrett of Churchill Personal Investments, contact
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Tel 0034 95 211 9728 or 0034 649 095 121
Michael and other members of the firm provide independent advice on all matters
regarding expatriate financial issues. The areas of specialisation include
retaining the confidentiality of finances, through specialised tax planning
structures, Portfolio Management, Offshore Strategies, Investment Advice, Trust
Arrangements, and Retirement Planning.
Casabonela is not responsible for errors and omissions on this
web site, professional advice should always be taken with regard to individual
circumstances Casabonela is not responsible for the content of any web sites
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