Inheritance Tax In Spain For Non Residents 2015?
- Víctormanuel Paz
Lost Password? – Enter your email address and we’ll send you a link you can use to pick a new password. Inheritance tax in Spain has recently had a makeover due to pressure from the European Court of Justice in 2014 that required it to bring its taxation rules into line with other EU countries, which it did so in January 2015.
However, it is vital to remember that the Spanish State has is not applying the new tax law across the country, as was the case prior to 2015 and instead has given each region has responsibility for the Inheritance Tax laws.
Before a new law came into being in 2015, non-residents often paid up to 80 percent more tax than Spanish residents. However, now inheritance tax laws can’t discriminate against non-residents and all EU citizens can ask to be treated in the same way as a Spanish citizen would, according to the local laws of their region.
Do non-residents pay inheritance tax in Spain?
EXAMPLES: Spanish Inheritance tax calculator in Andalusia –
- Dutch siblings Frank and Mark inherit their father’s property in Almuñécar , appraised at 300,000 euros. In this case, the answer is clear, each of them would pay zero in Inheritance Tax.
- Now siblings Frank and Mark inherit their older brother Jan’s property in Fuengirola , appraised at 300,000 euros. In this case, each would inherit 50% of the property, appraised at 150,000 euros. The only bonus that they may apply is for the first 7,993. 46 euros, for which reason each of them would pay the Treasury an amount of €31,393. 56
- Lastly, siblings Frank and Mark inherit their friend Martin’s property in Marbella , appraised at 300,000 euros. In this case, each would inherit 50% of the property, appraised at 150,000 euros. No reduction can be applied in this case, for which reason they would pay taxes on the entire amount received, resulting in a payment of €42,523. 07 from each.
Do I pay Spanish tax on UK inheritance?
How to avoid the double taxation – No matter if you are a tax resident in Spain or not, you can still be liable to pay inheritance tax in any other country, let’s say the UK. That is something that depends on where you are domiciled. If you are a British citizen in the UK but resident in Spain, you can be asked to pay in both countries. But how does it exactly work? You have two important amounts to consider:
- The quantity that is derived from applying the mean tax rate of the inheritance tax in Spain to the capital gains generated from the assets located abroad
- The actual amount to be paid abroad in regards to the foreign tax similar to the inheritance tax in the Spanish territory applied to the capital gains
You can deduct the lowest of the two , just in case we are talking about taxation that stems from personal liability.
Who pays Inheritance Tax in Spain?
Forced heirship rules in Spain – There are several rules concerning the disposal of your estate in Spain. If your estate is dealt with under Spanish inheritance law, forced heirship rules apply (the Law of Obligatory Heirs in Spain). This means there are restrictions on how you distribute your estate, as a certain percentage needs to be set aside for close relatives.
Again, these vary considerably from region to region. Overall, the nationwide Law of Obligatory Heirs states that if the deceased was married at the time of death, the spouse keeps 50% of all jointly-owned property.
The remaining 50% goes towards the estate. The division of the estate is into three equal portions:
- One third equally between any surviving children.
- The second one-third for surviving children but the deceased can distribute equally or unequally according to instructions in a will. The surviving spouse retains a life interest (usufruct) in this part of the estate and the children do not inherit until the spouse dies.
- The deceased may dispose of the final one-third freely in a will.
If there are no children, then surviving parents can claim one-third if there is a surviving spouse, or 50% if not. If there are no children, parents, or spouse, the deceased can leave this to anyone by means of a will in Spain or abroad. Foreigners living in Spain may not give away more than the freely disposed part of their estate (one-third), as the rest must be reserved for obligatory heirs.