Re: Inheritance Tax
 

Yes, very true - always a downside, isn't there? I've read articles by firms offering tax advice which advocate buying the property in the name of a company, but as far as I can see that involves quite a large annual outlay, can't really see the point unless the sum involved re IHT would run into millions. Never likely to be a problem for me, or my heirs!

Re: Inheritance Tax
 

Nor me I think it may be worthwhile if you have some super duper villa but not my little village house. As you say not much you can do about it really.

Re: Inheritance Tax
 

Won't have any assets in the UK we are moving to Spain and selling our property

Re: Inheritance Tax
 

But surely they have or should have contributed by means of non resident tax, so why not?

Re: Inheritance Tax
 

Hi

Many thanks everyone for you responses.

Won't be replying to anymore replies as the subject is going of course to my original question about Inheritaance tax but appreciate your responses.

I am going to a road show in London in March and hope to get legal advice there.

Thank you

Re: Inheritance Tax
 

Hey everyone.

Got confused with different opinions and wanted to clarify it finally.

What is the current IHT in Catalonia in case of:

1) Main home in Spain for my spouse/children

2) Overseas property of my parents (non Spain residents) to me

?

Seems like this article is outdated now and there is no 99% allowance anymore? Inheritance Tax scrapped in Catalunya

Re: Inheritance Tax
 

That article was completely wrong, the IHT was not scrapped but the allowances were increased considerably.

The 95% allowance on the habitual residence applies up to €500k and the additional spousal allowance was increased to €650k. Adult children get €400k.

Those allowances will result in most people having to pay no tax unless they are pretty wealthy.

BUT, Murcia, until recently, had even more generous allowances and recently decided to scrap them all! In fact, it was Murcia, not Cataluya that had the 99% allowance. So don't bank on it staying the same forever.

Re: Inheritance Tax
 

Hi Fred

Thanks! Surely it is "optimistic" to think this will be forever.

How about case 2? If I am going to inherit my parents property, which is not in Spain and not "main home"?

Re: Inheritance Tax
 

Sorry, I forgot to cover that.

You pay IHT as you are tax resident. You get the normal state allowances, but although you are residents of Catalunya, the deceased was not so you are not entitled to the special allowances.

Re: Inheritance Tax
 

So, this is something like ~16000 before taxing on the progressive scale? Not so promising!

Thanks for a quick advise, appreciate it.

Do I understand it correctly that in Murcia they abolished even main home relief? Say, elderly husband passes away and his spouse now has to pay cash within 6 month? Not even being able to exchange property to a smaller one to pay tax with price difference and live further?
I believe there is not so many properties within allowed 16000 range..

Re: Inheritance Tax
 

I think it is a dreadful injustice that the government could have done something , but didn't about making it fairer for residents in areas where allowances are much lower than those described, and even non existent where I live, Murcia. The region is supposed to have allowances that benefit residents. How can someone in one region be made to pay many thousands, and the person inthe next region, nothing!
I thought there was a petition to the EU about this?
I read that there was talk of IHT being 4 -11% IHT in all regions , 4 being for spouses, and 11 for more distant relatives. It should be a national tax not regional.
It has definitely put people off moving to Murcia as residents.
It played a big part in me wanting to leave Spain.

Re: Inheritance Tax
 

No, when I said the "normal" allowance, I meant the normal Catalunia allowances which are very big.

The basic 95% allowance for the habitual residence is a state rule, not a regional rule so it is not affected. There is a limit of €122k per inheritor, so you pay for anything above that.

Re: Inheritance Tax
 

Seems Catalunia feels rich enough not to rob its residents with too high IHT..

Any English language source on all these allowances and rules? Or is there Spanish only? :(

Re: Inheritance Tax
 

There is plenty of info in English on the web. Just Google IHT Spain.

However, this info usually only describes the system and gives the state allowances. Getting up to date info on the regional situation is more difficult especially as it is subject to change without notice.

The best source of detailed info is probably Blevins Franks, who publish an excellent guide to tax etc in Spain. They apparently published the latest edition in May this year.

You will have to buy it though.

Book Purchase Request

Re: Inheritance Tax
 

I have purchased 3 editions of that book and it is excellent they also used to give a discount if you had purchased it before. I was thinking that with the changes to the DTT it was time to buy again but along have come a whole raft of potential changes to the tax laws so I wonder if I should hold off for a couple of months. In one edition they even included a loose page of updates the rules change so fast here!