Double Taxation Agreement Spain Inheritance Tax

Catalusa offers 99% inheritance relief for spouses. The other members of Groups I and II receive relief depending on the size of their heritage. Personal discounts amount to 100,000 euros for spouses and children (more for under-21s), 50,000 euros for other descendants, 30,000 euros for ascendants and 8,000 euros for other parents. The main 95% relief for houses is 500,000 EUROS, the amount being less than the beneficiaries (at least 180,000 EUR limit). The property must be kept for only five years (it is 10 according to state rules). There is no tax evasion or anything illegal or reprehensible if a property is purchased in the name of a foreign company or later transferred to a foreign enterprise structure. Potential tax evasion lies in the assumption that, once the owner of the shares of the foreign company has died, his heirs would not pay inheritance tax in Spain for the property located here. We go back to our previous point, that early planning is essential, that QNUPS is primarily a pension system and that it must be set up as such – nothing serves our 90-year-old, who is trying to create a pension plan, hmrc will see that as tax evasion and will withdraw tax relief if the executors file their accounts. On the basis of this judgment, the Spanish government adopted the third last provision of the 26/2014 law until 28 November 2014. It was decided that the rules of autonomous communities are fully applicable when a Spanish asset is acquired by a person who is not resident in Spain but established in an EU or EEA country. Therefore, if a property is located in Mallorca, the 99% discount applies entirely. If the accommodation is located in Andalusia, the special rules of this region apply. In Spain, one might think that HMRC and the British inheritance tax system have been taken away.

Unfortunately, the responsibility for British inheritance tax is determined by residence, which is a complex and incredibly sticky British legal concept. This article presents options for British expats in Spain who wish to reduce their inheritance tax obligation in the UK. Let us also not forget that the laws governing estates, foreign investments, taxes or businesses change from time to time, both in Spain and in the countries of origin of our clients. We need to take these potential changes into account and try to anticipate them as much as possible, since the estate tax advice covers future situations, so we need to understand that the solutions we have finally launched when they need to produce results may not be effective.

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