| Gift
& Inheritance Tax Multiplier |
| Euro
Estate |
Tax
Payable - Married |
Tax
Payable – Unmarried(No €15,957
exemption) |
| 50,000 |
3,083 |
9,898 |
| 100,000 |
9,838 |
24,831 |
| 200,000 |
28,250 |
63,282 |
| 400,000 |
76,898 |
162,038 |
| 750,000 |
180,397 |
370,288 |
| 1,000,000 |
262,697 |
536,245 |
| 2,000,000 |
602,697 |
1,216,245 |
| 5,000,000 |
1,622,697 |
3,256,245 |
| 10,000,000 |
3,322,697 |
6,656,245 |
It should be noted that, if the wife in her
own name is worth more than €402,678.11
the tax payable is, in effect, increased by
as much as 20%.
Note also that this tax cannot be offset against
any UK inheritance tax. There is nothing to
offset against where both husband and wife
are UK domiciled, since there is no UK
tax payable (just Spanish tax). Finally,
there are no exempt limits for gifts in
one’s lifetime; it is all taxable.
However, in practice, of course, normal
gifts are not taxed. Moreover, it is very
much Spanish practice that any property
such as furniture, pictures, etc. which
is not registered (ie, most assets excluding
property and cars) are given away, and no-one
in Spain would file a gift tax return in
such circumstances.
An Example of Spanish Inheritance Tax.
Each child inheritor can claim the standing
deduction of €15,956.87.
For example, if a flat or small house worth
€80,000 is left to four children equally,
each child inherits €20,000. Each adult
child can then deduct the standard amount
of €15,956.87,
leaving €4,043.13
each liable to Spanish succession tax. The
heirs would pay less than €309.30 Spanish
succession tax each. Note, however, that
the deceased is a UK domicile, the Spanish
assets remain liable to UK inheritance tax,
and all assets in excess of £255,000
are liable to 40% tax. Any tax paid in Spain
can be deducted against the UK tax liability
to avoid a double tax charge.
Responsibility
to declare the death to the Hacienda
On the first death, the surviving spouse
has six months to inform the authorities
and pay the tax. There is an extension of
up to six months obtainable by application
within the first five months and this extension
is deemed granted if no reply is received
within one month. Note that if this is not
done, and the title deeds (escritura) to
the property remain in the deceased’s
sole, or joint name, then it cannot be sold.
There are also heavy penalties and interest
for non-payment of the Spanish inheritance
taxation on time.
Spanish
Inheritance Tax Rates
Spanish inheritance tax is payable by the
recipient. The actual tax rates payable
are based on:
The relationship of the recipient to the
donor (or deceased), and
The wealth of the recipient prior to the
transfer (“pre-existent net worth”)
The highest real rate of tax is just under
82% on this basis, though before any multipliers
the rate stands at 34%.
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