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BREXIT and Inheritance Tax

Posted in: Brexit, Information Topic,
Author: Myra Cecilia Azzopardi
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4 Comments

In answer to the member who asked if inheritance taxes would increases by 90% I did not know the percentage but was aware of the changes due after a possible BREXIT. I emailed a very good notary known to me for many years and they have kindly responded with the information pasted below.

Hi Myra. Its very simple really!
Each of the autonomous regions in Spain have their own Inheritance Laws, which will be applied to wherever the property is situated.

In Andalucía, all european nationals, residing in the European Union, are entitled to the same deductions as the Andalucian residents. This means up to 175.000,- euros per heir, free of Inheritance Tax.
In other words, if Britain comes out of the Union, British nationals will no longer be classified as european members liable for these deductions, therefore only being entitled for the state deduction of 15.956,87 euros per heir, if they are direct descendants – this means a huge difference!!

i.e. A British couple jointly owning a property on the Costa del Sol, valued at 200.000 euros (100.000,- each per half; remember there could also be bank accounts
or car to add to the estate, too!!))

One of the spouses sadly dies leaving that half to the surviving spouse, the heir would, in fact, be potentially liable for over ten thousand euros in Inheritance Tax.
The higher the amount that is inherited, the higher the applicable tax percentage actually becomes.

Please note: The information provided is based upon our understanding of current legislation. It is not legal advice but is provided freely to enable you to be properly informed. We recommend that if you are considering taking action, you should seek professional advice.

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Comments

4 Comments

  • #1. Jacqueline Rees said on Monday, June 13, 2016 at 20:08:13 CEST

    Well we live in the Murcia Region and Inheritance Tax thresholds are abominable so will not affect us.I suggest everyone sells their property and buys a motorhome and lives in all different countries xx

  • #2. Jeff said on Tuesday, June 21, 2016 at 13:09:09 CEST

    What a good idea! I wonder who will purchase the houses if they are made aware of the horrendous IHT laws here in Spain.

  • #3. Snoopy said on Tuesday, February 21, 2017 at 18:42:15 CEST

    What happens if you do not have the funds to pay the IHT?

  • #4. Myra Cecilia Azzopardi (Official CAB Advisor) said on Tuesday, February 21, 2017 at 18:47:36 CEST

    You can ask for an extension to pay. This must be done in writing both to the tax authority and to the town hall payment of the plusvalia The notification should be sent early and certainly before the six months payment limit. If the tax cannot be paid at all, the property will eventually go to the State.

    Please note: The information I provide is based upon my understanding of current legislation. It is not legal advice but is provided freely to enable you to be properly informed. I recommend that if you are considering taking action, you should seek professional advice.