Inheritance Tax DeductionsIn Andalucía

This presentation has been updated and is valid for 2014.

Inheritance Law in Andalucía

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There are special regional tax deductions and exemptions

passed by the local government in Andalucía that only apply

to those beneficiaries who have been resident in the region.

Inheritance Law in Andalucía

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If you have NOT been resident in the Andalucía region then,

when determining your inheritance tax liability, you may only

apply the deductions and exemptions approved by the

CENTRAL government.

Inheritance Law in Andalucía

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The central government exemptions and deductions are not

as generous as the regional exemptions.

This has caused complaints that the inheritance tax laws in

Spain are discriminatory against non-residents.

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Inheritance Law in Andalucía

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The regional level exemptions available in Andalucía were

enacted by the Seville parliament and in their current form

are specified in Legislative Decree1/2009.

The most important changes to state succession laws may

be summarised as follows:

Inheritance Tax Law in Andalucía

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Spanish Inheritance law first assigns beneficiaries to groups according to the degree of kinship with the deceased:

Group I Children, including adopted children, under the age of 21

Group II All other descendants, spouses and parents

Group III Close relatives such as brothers and sisters, grandparents,

aunts and uncles

Group IV More distant relatives

Personal Deductions

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The following are the personal exemptions available in Andalucía:

Group Deduction

Group I A 100% exemption where the estate is valued at less than €175,000 and the pre-existing wealth of the

beneficiary is less than €402,678.11

Group II A 100% exemption where the estate is valued at less than €175,000 and the pre-existing wealth of the

beneficiary is less than €402,678.11

Group III State Level Deduction only: €7.993

Group IV No deductions available

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If the beneficiary is disabled > 33%:

There is an exemption of 100% for an inheritance where

the taxable value of the inheritance is less than or equal to

€250,000 (for inheritances after June 2010)

If the beneficiary is in Group III or IV then their pre-existing

wealth should not be more than €402,678

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Inheritance of the Family Home:

Where a property is inherited being the family home

then a reduction amounting to 99.99% may be made

The beneficiary should be the spouse or child of the

deceased

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Inheritance of the Family Home Cntd...

• Elderly relatives who were living with the deceased for

a period of two years prior to the death may also

benefit

• The property may not be sold for a period of 10 years

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Deductions in transfer of Family Business

Tax deduction of 99% of the value of the business

May be children, spouse or any relative 'to third

degree of sanguinity' who may benefit from the

deduction

Must maintain business for a period of no less than 5

years

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Deductions on income from Life Insurance:

A deduction of up to €175,000 may be made on inheritance of

money from a life insurance policy

Any descendent, parent or spouse with less than €402,678 in

personal wealth may benefit from this deduction

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Other Deductions:

As a general rule the following deductions may be made on any estate:

Funeral Expenses

Final Medical Expenses of the Deceased

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Other Deductions Cntd:

Debts held be the deceased that are evidenced by public

documents e.g. a mortgage

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Once the final amount of tax payable is determined then it is necessary to apply the relevant rate:

Tax Rates in Andalucía

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Tax Rates in Andalucía

Taxable Sum

Tax Payable On This Sum

Any Remainder Up To Applicable Rate on Remainder (%)

0 0 7993,46 7,65

7993,46 611,5 7987,45 8,5

15980,91 1290,43 7987,45 9,35

23968,36 2037,26 7987,45 10,2

31955,81 2851,98 7987,45 11,05

39943,26 3734,59 7987,46 11,9

47930,72 4685,1 7987,45 12,75

55918,17 5703,5 7987,45 13,6

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Tax Rates in Andalucía

Taxable Sum

Tax Payable On This Sum

Any Remainder Up To

Applicable Rate on Remainder (%)

63905,62 6789,79 7987,45 14,45

71893,07 7943,98 7987,45 15,3

79880,52 9166,06 39877,15 16,15

119757,67 15606,22 39877,16 18,7

159634,83 23063,25 79754,3 21,25

239389,13 40011,04 159388,41 25,5

398777,54 80655,08 398777,54 31,75

797555,08 199291,4 And Above 36,50

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Existing Wealth

Once the relevant tax rate has been applied the result is multiplied by a coefficient determined by the existing wealth of the beneficiary as well as the group to which they belong:

Existing Wealth Groups

(In Euros) I & II III IV

0 to 390,657 1 1.5882 2

390,657 to 1,965,309 1.05 1.6676 2.1

1,965,309 to 3,936,629 1.1 1.7471 2.2

More than 3,936,629 1.2 1.9059 2.4

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Existing Wealth

The Groups referred to consist of the following beneficiaries:

Group I Children, including adopted children, under the age of 21

Group II All other descendants, spouses and parents

Group III Close relatives such as brothers and sisters, grandparents,

aunts and uncles

Group IV More distant relatives

Each year in Spain thousands of expats pay more

tax on inheritance than they should – simply

because they fail to follow some simple rules.

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To find out how to get expert advice, in English, about how to

reduce your liability for inheritance tax, go to:

Expert Probate Services in Andalucia

Expert Probate Services in Andalucia

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