LawTalk
IHT Tax allowance Andalucía
As a result of recent inheritance tax changes , Andalucía is now one of the most attractive places in Europe to buy property . Not only due to its wonderful climate , culture and beaches but also to a very favourable inheritance tax regime .
Until relatively recently one of the main disadvantages of buying a property or holiday home in Spain was the high level of inheritance tax and the lack of an exemption for spouses , and generally fewer reductions .
There have been several beneficial changes in the last few years , the latest of which is the recent judgment of Spain ’ s supreme court in February 2018 - Supreme Court decision 242 / 2018 .
Spain has many autonomous regions , all of which have different inheritance tax allowances - some more generous than others . Previously these allowances were only applied when both the deceased and the beneficiaries are officially resident in Spain .
In the case of residents , the tax rules of that particular region applied . If either the deceased or the beneficiary is nonresident then the State inheritance tax rules applied . This includes cases where Spanish residents receive an inheritance from outside of Spain . This meant that non-resident beneficiaries often paid much more inheritance tax than residents would . This was changed in 2014 by a European
Court of Justice ruling ( C-127 / 12 ) which held that the regional allowance where the deceased had the majority of their assets in Spain will apply as long as the beneficiary was resident in the European Union .
This was good news for people resident in Spain or who owned properties in Spain , as their beneficiaries now received the regional allowances as long as they resided anywhere in the European Union . It wasn ’ t so good for beneficiaries who resided in countries outside of the EU such as the United States , Australia , etc , and we had thought it would adversely affect beneficiaries living in a post-Brexit United Kingdom . However , the Supreme Court of Spain has now declared that the allowances will apply to any beneficiary wherever they may reside .
Added to this , Andalucia at the start of 2018 has massively increased the inheritance tax allowance for a spouse , child , parent or grandchild of a deceased person to 1,000,000 € per beneficiary . Which means someone with a spouse and three children could leave an estate of up to four million to them completely free of inheritance tax .
De Cotta Law ( De Cotta McKenna y Santafé ) Mijas-Costa / Calahonda – Coín – Nerja – Tenerife
Nerja Office : - Calle Diputación 11 , 29780 Nerja Tel : + 34 952 527 014 - Fax : + 34 952 523 428 www . decottalaw . com - E-mail : nerja @ decottalaw . net
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