SPAIN Inheritance and gift tax

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SPAINInheritance and gift tax
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INHERITANCEand GIFT TAX
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contents SPAIN

• Basics
• Taxable persons
• Fiscal residency/nationality
• Spanish inheritance tax regulation
• Taxable base for taxpayers or deceased
  non-residents
• Tax basis
• Allowances
• Tax rates.
• Quote multiplier coefficient
• Double taxation relief
• Agreements exist with the following countries
• International double taxation relief.
• Trusts / Donations and examples

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• Basics
• a.a. Taxable persons - Fiscal residency/nationalit
  y

• Spanish fiscal residence concept
• Individuals who remain in Spain for more than 183
  days during a calendar year.
• Except tax residence certificate in another
  country.
• His main base or centre of activities or economic
  interest is, directly or indirectly in Spain.
  
• It is presumed the residence in Spain when his
  spouse-not legally separated and
• underage dependent children are permanent
  residents in Spain.
• This concept is applicable also for inheritance
  tax purposes but the estimation of the 183 days
  is for the last year period.
• Nationality Individuals of Spanish nationality
  who prove their new residency in a tax haven,
  will continue to be deemed residents in Spain for
  income tax purposes during 5 years. It is not
  clear if it this presumption is applicable for
  inheritance and gift tax purposes.

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• Basics
• a.b. Taxable persons Spanish inheritance and
  gift tax regulation

• Spanish Inheritance and gift tax regulation
• Taxpayer residence
• - Resident Worldwide income.
• Non-resident Assets located in Spain or rights
  exercised in Spain.
• b) Assets located in Spain
• Real Estate.
• Other assets related with real estate located in
  Spain.
• Spanish life insurance.
• Rights exercised in Spain (v.g. Spanish company
  shares).
• Foreign residents who opt to pay as a
  non-residents for income tax purposes also are
  taxed as a non-resident for Spanish inheritance
  tax purposes.

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• Basics
• a.b. Taxable persons Spanish inheritance and
  gift tax regulation

• Spanish Inheritance tax regulation
• Taxpayer Resident Autonomous Community (CCAA)
  regulation.
• b) Taxpayer or deceased Non-Resident Estate
  regulation.

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• GREEN ZONE CCAA where there is no taxation or
  very reduced for inheritance and gift tax.
• ORANGE ZONE CCAA where there is no taxation or
  very reduced for only inheritance tax.
• RED ZONE CCAA where there is no relevant
  measures for reducing taxation.

• Basics
• a.b. Taxable persons Spanish inheritance and
  gift tax regulation

Taxpayer resident Autonomous community disperse
regulation
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1. Basics b.a. Taxable base for taxpayers or
deceased non-residents-Tax basis

• In general, the valuation of the assets is the
  real value.
• Specifics valuations
• Real estates Market Value. Skills for the
  valuation by Tax Administration
• Expert appraisal
• Insurance policy
• The value given in other transfer (before or
  after).
• Business assets Book value.
• Shares of corporations and partnerships The
  highest of
• Nominal value
• Net asset value (except real estate companies)
• Capitalized value

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• Basics
• b.b. Taxable base - Allowances

Spanish personal allowances only for inheritance
tax
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• Basics
• b.b. Taxable base Allowances

Other Spanish allowances
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• Basics
• b.c. Taxable base-Tax rate scale

Inheritance and gift tax
0,00 7.993,46 15.980,91
23.968,36 31.955,81 39.943,26 47.930,72
55.918,17 63.905,62 71.893,07
79.880,52 119.757,67 159.634,83 239.389,13 398.777
,54 797.555,08
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• Basics
• b.d. Taxable base- Quote multiplier coefficient

Tax class
Pre-existent wealth
I II
III
IV
(See tax class in personal allowances)
From 0 to 402.678,11 EUR From 402.678,11 to
2.007.380,43 EUR From 2.007.380,43 to
4.020.770,98 EUR More than 4.020.770 EUR
1,0000 1,0500 1,1000 1,2000

• 1,5882
• 1,6676
• 1,7471
• 1,9059

• 2,0000
• 2,1000
• 2,2000
• 2,4000

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2. Double taxation relief
a. Agreements with the following countries

• Tax treaties covering inheritance tax
• Greece
• Sweden
• France

• There is not tax treaties covering gift tax.
• b. International double taxation relief
  Individual resident who pay for his worldwide
• income can deduct to the taxable quote the
  lower of
• The amount paid in the foreign country.
• Spanish tax rate average taking into account all
  the assets received.

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3. Trusts / Donations and Examples

• Trusts In Spain there is not Trust legislation.
• Vehicles to avoid inheritance and gift taxation
• To reduce taxation To set up an active company
  or a business activity.
• To avoid o reduce taxation being resident in
  Green or Orange Zones CCAA (the individual has
  to remain in this CCAA during at least 5 years).
  or in a foreign country

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3. Examples

• UK residents inheritance with a beneficiary
  resident in Spain
• Application of International double taxation
  relief in spite of the
• taxpayer in both countries is not the same
• In UK are the executors who pay the inheritance.
• In Spain is the beneficiary who pay the
  inheritance.