Inheritance Tax DeductionsIn Cantabria

This presentation has been updated and is valid for 2014.

Inheritance Law in Cantabria

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In Spain, inheritance law was originally controlled by the

central government alone.

But in 2001 the power to set inheritance tax rates and

deductions were devolved to the regional parliaments.

Inheritance Law in Cantabria

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However, the tax laws enacted by the regional parliaments,

including deductions and exemptions, only apply to those

beneficiaries who have been resident in the region over the

balance of the previous five years.

Inheritance Law in Cantabria

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If you have been resident then when determining your

inheritance tax liability you must see if the regional

government has approved a deduction or exemption.

If not, you should apply the national deduction or exemption.

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Inheritance Law in Cantabria

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 the Cantabria

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The regional level exemptions available in Cantabria were

enacted by the Santander parliament and in their current

form are specified in Law 11/2002, Law 1/2005 and

Legislative Decree 62/2008

The most important changes to state succession laws may

be summarised as follows:

Inheritance Tax Law in Cantabria

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Personal Deductions

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

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

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The following are the personal exemptions available in Cantabria:

Group Deduction

Group I a deduction of €50,000 plus €5,000 for each year under 21

Group II a deduction of €50,000 is applicable

Group III a deduction of €8,000 is available

Group IV No deductions available

Personal Deductions

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If the beneficiary is disabled:

An exemption of €50,000 additional to any personal

exemption if physical disabilty > 33% or sensory > 65%

If the disability is > 65% then the beneficiary may apply a

deduction of €200,000

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Deductions on income from Life Insurance Policy:

An exemption on income from a Life Insurance Policy

held by the deceased is available to beneficiaries being

either the spouse or a child (or adopted child) according

to the following limits:

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Deductions on income from Life Insurance Policy:

Beneficiary Deduction

Spouse 100% exemption from taxes up to a maximum of €206,780

Child below age of majority

100% exemption from taxes up to a maximum of €310,170

Child under age of 30

100% exemption from taxes up to a maximum of €103,390

Parent living with deceased

100% exemption from taxes up to a maximum of €189,548

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Deductions in transfer of Family Business

Tax exemption of 99% of the value of the business

To benefit from this deduction the beneficiary should be

either a child or spouse of the deceased

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Deductions in transfer of Family Business Cntd..

If no child or spouse any relative 'to third degree of

consanguinity' may benefit from exemption

Must maintain business for a period of no less than 5

years

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Inheritance of the Family Home

Exemption exists for child, spouse and parent of the

deceased. Also any relative over 65 years of age who has

spent at least two years in the home prior to inheritance

Value of exemption is 99% of value of the property

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Inheritance of the Family Home Cntd...

Property may not be sold for 10 years after inheritance

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General Rules

Any asset which has been subject to more than one

inheritance within a period of 10 years may have any tax

paid in the previous inheritance deducted from it's value

for the purposes of calculating inheritance tax.

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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 all deductions have been applied the final amount of tax payable is determined then it is necessary to apply the relevant rate:

Inheritance Tax Rates in Cantabria

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Tax Rates in Cantabria

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 Cantabria Cntd...

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 29,75

797555,08 199291,4 and above 34

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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 a 403,000 1 1.5882 2

403,000 to 2,007,000 1.05 1.6676 2.1

2,007,000 to 4,020,000 1.1 1.7471 2.2

More than 4,020,000 1.2 1.9059 2.4

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

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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 where to get expert advice, in English, about how

to reduce your liability for inheritance tax, go to:

Expert Probate Services in Cantabria

Expert Probate Services in Cantabria

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