– A+B, British, 62 years old each, and Spanish residents, own a Spanish property. They have 2 sons. Sons are not Spanish residents.
– Both have made a “mirror Will” (A leaves everything to B, and vice versa), and if they died together they leave to both Sons “SON 1” and “SON 2” in equal parts.
EXAMPLE 1.: “A” DIES”
“B” is the legal inheritor, and he/she receives the “A” part, which is the 50 % of the property, valued in 150.000 EUR. So, the base of the IHT calculation is 150.000 EUR.
- IF THE PROPERTY IS PLACED IN VALENCIA REGION: There is a minimum amount from which, for surviving spouses and descendants, there is no tax (Minimum exempted amount), which is 100.000 EUR.
So, the “B” base of the tax will be 150.000 EUR – 100.000 EUR = 50.000 EUR.
Also, Valencia region, in case of surviving spouses and descendants, reduces the rate of the IHT in 75 %.
Taking this into account, if the property was in Valencia region, “B” should be paying in inheritance taxes 1.200-1.400 EUR (approx.)
In case the house is the permanent residence, then “B” would be paying 200-500 EUR only.
- IF THE PROPERTY IS PLACED IN MURCIA REGION: There is a minimum amount from which, for surviving spouses and descendants, there is no tax (Minimum exempted amount), which is 16.000 EUR.
So, the “B” base of the tax will be 150.000 EUR – 16.000 EUR = 134.000 EUR.
Also, Murcia region, in case of surviving spouses and descendants, reduces the rate of the IHT in 60 %.
Taking this into account, if the property was in Murcia region, “B” should be paying in inheritance taxes 7.500 EUR (approx.).
In case the house is the permanent residence, then “B” would be paying 200-500 EUR only.
- IF THE PROPERTY IS PLACED IN ANDALUCIA REGION: There is a minimum amount from which, for surviving spouses and descendants, there is no tax (Minimum exempted amount), which is 175.000 EUR.
Taking this into account, if the property was in Andalucía region, “B” should be paying “0” in inheritance taxes.
EXAMPLE 1.: “A” + “B” DIES TOGETHER IN AN ACCIDENT:
“SON 1“ and “SON 2” will be the legal inheritors, and they receive the 100 % of the house valued in 300.000 EUR. So, the base of the IHT calculation is 300.000 EUR.
“SON 1” receives the 50 % of the house, so, the value of this is 150.000 EUR, and the same for “SON 2”.
- IF THE PROPERTY IS PLACED IN VALENCIA REGION: There is a minimum amount from which, for surviving spouses and descendants, there is no tax (Minimum exempted amount), which is 100.000 EUR (156.000 EUR if under age of 21 y.o.)
Taking this into account, if the property was in Valencia region, “SON 1” and “SON 2” would be paying in inheritance taxes 1.200-1.400 EUR (approx.) each, and “0” if they are under 21 years old.
- IF THE PROPERTY IS PLACED IN MURCIA REGION: There is a minimum amount from which, for surviving spouses and descendants, there is no tax (Minimum exempted amount), which is 16.000 EUR or up to 48.000 EUR if under 21 years old.
Taking this into account, if sons were older than 21 y.o, and if the property was in Valencia region, sons should be paying in inheritance taxes 7.500 EUR (approx.) each.
- IF THE PROPERTY IS PLACED IN ANDALUCIA REGION: There is a minimum amount from which, for surviving spouses and descendants, there is no tax (Minimum exempted amount), which is 175.000 EUR.
Taking this into account, if the property was in Andalucía region, both sons should be paying “0” in inheritance taxes.
Please, note that what we have considered in this topic is exclusively for Inheritance Tax calculations. On top of the inheritance tax there will be other expenses related as:
- Searches of Spanish assets, testaments, probates, etc.
- Legalisation and translation of official documents
- Obtaining NIE number from all the inheritors
- Notary and land registry fees
- Solicitor fees
- Valuation and surveys on property assets
- Updating deeds and council tax for eventual construction and extensions done at the property
- Changing of names of utility contracts and council tax
- Renovation of Certificate of Habitation
- Local Plusvalia tax
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