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New laws regarding Inheritance- Advice?

New laws regarding Inheritance- Advice?

Old Jan 13th 2007, 3:52 am
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Default New laws regarding Inheritance- Advice?

I believe that there is a new law regarding almost abolishing Inheritance Tax in the Valencian region.
Anyone shed any light on this subject.
Regards
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Old Jan 13th 2007, 6:57 am
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Default Re: New laws regarding Inheritance- Advice?

Originally Posted by BigD
I believe that there is a new law regarding almost abolishing Inheritance Tax in the Valencian region.
Anyone shed any light on this subject.
Regards

Was it you that posted this on another forum? If not, I was with my solicitor this week discussing this and apparantly there are moves afoot to abolish IHT on estates left to spouse and children.

As I said on the other forum, I assumed she had been drinking as it seems a pretty generous thing for the Spanish to do ... but she did seem certain and said she would keep me informed (at a price )

Last edited by Mitzyboy; Jan 13th 2007 at 8:46 am. Reason: spelling
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Old Jan 13th 2007, 7:55 am
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Default Re: New laws regarding Inheritance- Advice?

A similar situation exists in Andalucía regarding IHT but the inheritor has to keep the property for at least ten years.
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Old Jan 13th 2007, 11:06 am
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Default Re: New laws regarding Inheritance- Advice?

Originally Posted by Mitzyboy
Was it you that posted this on another forum? If not, I was with my solicitor this week discussing this and apparantly there are moves afoot to abolish IHT on estates left to spouse and children.

As I said on the other forum, I assumed she had been drinking as it seems a pretty generous thing for the Spanish to do ... but she did seem certain and said she would keep me informed (at a price )
There is an article in this weeks Costa Blanca News, where it says that the tax will be reduced to 1%

Cheers

Paul
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Old Jan 14th 2007, 3:21 am
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Default Re: New laws regarding Inheritance- Advice?

Originally Posted by Mitzyboy
Was it you that posted this on another forum? If not, I was with my solicitor this week discussing this and apparantly there are moves afoot to abolish IHT on estates left to spouse and children.

As I said on the other forum, I assumed she had been drinking as it seems a pretty generous thing for the Spanish to do ... but she did seem certain and said she would keep me informed (at a price )
Yes it probably was me that asked before.
I hear that the law is changing ,there was an article regarding this issue in the Costa Blanca News, but I keep hearing different views.
If you do hear anything of interest , would you be kind enough to let me know.
As we come under common law rules Inheritance Tax would affect me quite greatly, we would be in the group 4 band which can be as much as 35% of the Inheritance
So hoping to do something in order to avoids this happening , if need be.
Kind Regards
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Old Jan 21st 2007, 2:12 am
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Default Re: New laws regarding Inheritance- Advice?

As far as I know, the new reduction only applies between spouses and children, and even then,they must be resident in the Valencian Community.
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Old Jan 21st 2007, 2:17 am
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Default Re: New laws regarding Inheritance- Advice?

Originally Posted by rusticasa-spain
As far as I know, the new reduction only applies between spouses and children, and even then,they must be resident in the Valencian Community.

That would make sense .... so it indemnifies Spanish nationals and their children, but not expats who have retired here
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Old Jan 21st 2007, 2:29 am
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Default Re: New laws regarding Inheritance- Advice?

Originally Posted by Mitzyboy
That would make sense .... so it indemnifies Spanish nationals and their children, but not expats who have retired here
Apparently it applies to residents in Valencia, therefore if spanish offspring live elsewhere in Spain,they won't benefit either.
It will apply to British husbands/wives/children living in the Valencian community. The answer may be to move in with Mum or Dad & register on the Padron just before they snuff it - seems you just need to be resident on the date of death to benefit! Expert opinion seems to be that we no longer need residence permits...........
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Old Jan 21st 2007, 3:06 am
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Default Re: New laws regarding Inheritance- Advice?

Originally Posted by rusticasa-spain
Apparently it applies to residents in Valencia, therefore if spanish offspring live elsewhere in Spain,they won't benefit either.
It will apply to British husbands/wives/children living in the Valencian community. The answer may be to move in with Mum or Dad & register on the Padron just before they snuff it - seems you just need to be resident on the date of death to benefit! Expert opinion seems to be that we no longer need residence permits...........
Don't confuse residents permits with tax residency.

To get any of the CGT and IHT benefits that apply to residents you need to be tax resident in Spain.

That means that you, or your spouse or children need to be paying Spanish income tax or have a certificate of tax resdidency.
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Old Jan 21st 2007, 3:09 am
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Default Re: New laws regarding Inheritance- Advice?

Hi rustica-spain,

Do you really mean resident on the date of death or "tax" resident on the date of death. Quite another matter since if you are tax resident you will have spent 183 days in Spain and presumably be registered on the padron and paying all of your local, provincial and national taxes including wealth tax on your worldwide assets. The sprogs with homes back in UK might not think that is a good bargin!

Regards,

John.

PS I am really interested in this since I am just about to complete on my plot and build a villa in Andalucia which should considerably enhance the value of my estate. So now is the time to do the forward planning.

Originally Posted by rusticasa-spain
Apparently it applies to residents in Valencia, therefore if spanish offspring live elsewhere in Spain,they won't benefit either.
It will apply to British husbands/wives/children living in the Valencian community. The answer may be to move in with Mum or Dad & register on the Padron just before they snuff it - seems you just need to be resident on the date of death to benefit! Expert opinion seems to be that we no longer need residence permits...........
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Old Jan 21st 2007, 3:54 am
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Default Re: New laws regarding Inheritance- Advice?

Originally Posted by John & Kath
PS I am really interested in this since I am just about to complete on my plot and build a villa in Andalucia which should considerably enhance the value of my estate. So now is the time to do the forward planning.
You and me both ...... the only possible realistic answer I found so far was to take out life insurances on each other, thereby negating some of the effect of IHT. My hopes were raised when my abogado told me the laws were changing .... I'm seeing her again tomorrow so I'm going to ask her to look into the changes further and see exactly who it effects.
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Old Jan 21st 2007, 4:34 am
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Default Re: New laws regarding Inheritance- Advice?

read this from big D
Originally Posted by John & Kath
Hi rustica-spain,
It is worth looking into quite an eyeopener! if you leave your house even if your partner resides there your are still liable for Inheritence Tax, and it is quite a lot to pay, and you only get six months to pay, and you can't sell the property to pay of this Tax.
Crazy or what? there are four classes and depending which category you fall into you can pay from 7.65% to top rate of 40% of your Inheritance.
Graydon Associates Website explain this, worth looking it up.
A lot of people don't realize just how bad this Tax can be, of course if you have thousand & thousands of euros hidden under your bed no need to worry.
Regards

Do you really mean resident on the date of death or "tax" resident on the date of death. Quite another matter since if you are tax resident you will have spent 183 days in Spain and presumably be registered on the padron and paying all of your local, provincial and national taxes including wealth tax on your worldwide assets. The sprogs with homes back in UK might not think that is a good bargin!

Regards,

John.

PS I am really interested in this since I am just about to complete on my plot and build a villa in Andalucia which should considerably enhance the value of my estate. So now is the time to do the forward planning.
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Old Jan 21st 2007, 8:04 pm
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Default Re: New laws regarding Inheritance- Advice?

Originally Posted by Mitzyboy
Was it you that posted this on another forum? If not, I was with my solicitor this week discussing this and apparantly there are moves afoot to abolish IHT on estates left to spouse and children.

As I said on the other forum, I assumed she had been drinking as it seems a pretty generous thing for the Spanish to do ... but she did seem certain and said she would keep me informed (at a price )
Inheritance tax is being dropped, PROVIDING, the person inheriting is resident in Spain at the time of the persons death.
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Old Jan 21st 2007, 8:45 pm
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Default Re: New laws regarding Inheritance- Advice?

I'm certainly not a tax expert, and would recommend anyone concerned to consult a tax advisor. Don't depend on websites which may be in another area or out of date, and forums such as this should be used for guidance but not relied on!
The survivor of an average couple who sell up and move to the Valencian Community will not pay inheritance tax, or only a tiny amount, on the death of the partner. If they only have state pension, they will not have to make tax returns, so those residents who have not been paying tax will also benefit. They will be considered resident from the day they move over.If you are resident, you automatically would be obliged to pay any taxes due, regardless of how many days you were here.
The date the inheritance tax effectively becomes payable is the date of death.
Different rules apply to different areas, and what applies in Valencia cannot be assumed to apply in all of Spain.
Just a note to John and Kath, if you are buying a rural plot, do make sure that you can build on it by checking at the town hall. Andalucia has some very strict rules regarding rural building.
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Old Jan 22nd 2007, 3:08 am
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Default Re: New laws regarding Inheritance- Advice?

Well, as always, things are as clear as mud after I read Rusticas post.

I agree, its clearly a good idea to take professional advice because what my solicitor is telling me, and what I read in my bible ( David Searl's You and the Law in Spain are differing to some extent.

The Bible says you can reduce your IHT to nearly nothing, but you have to keep the house for 10 years, be a resident card holder for 3 years, my solicitor says thats not necessarily the case.
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