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An example of calculation of Spanish Inheritance Tax

–       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 when both die leave everything 50 % to both Sons.

–      It is calculated the value of the property with 300.000 EUR, but, for your information, the value to calculate will be the “catastral value” multiplied by determinate coefficients (usually 2 or 3, depending on the area). But, we can use the supplied value of 300.000 EUR to make the example:

TOTAL VALUE (i) 300.000
AJUAR DOMÉSTICO (ii) 9.000
EXPENSES (iii) 3.932,73
(ie Funeral or expatriation)  
NET BASE IMPONIBLE (i+ii+iii) 305.067

CASE 1 :  A dies, and B received the inheritance. As B is Spanish resident, due to the reductions and benefits of the Spanish resident, B pays “0” IHT, in the folloiwng way:

SURVIVING SPOUSE
152.534
To multiply per 1 (if Wealth less than 390,000 EUR)
TOTAL INHERITED 152.534
a) If mother non resident  
Reduction Grupo II -15.956,87
SUB TOTAL 136.576,77
Up to 120000 15.600,00
Rest till the Subtotal 18,70% 3.099,86
TOTAL TO PAY 18.699,86
b) If mother resident  
Reduction Valencia 40.000
Reduction Permanent Home 47.239
TOTAL REDUCTIONS 87.239
TOTAL TO PAY 0

CASE 2 : In case 2, A+B die, and Sons receive 50 % each. They have some reductions, but not all that they could have if Spanish residents.

SON 1
TOTAL PROPERTY/2 152.533,64
To multiply per 1 (if Wealth less than 390,000 EUR)
SUB-TOTAL BASE 152.533,64
   
Reduction Grupo II -15.956,87
SUB TOTAL 136.576,77
Up to 120000 15.600,00
Rest till the Subtotal 18,70% 3.099,86
TOTAL TO PAY 18.699,86
   
SON 2
TOTAL PROPERTY/2 152.533,64
To multiply per 1 (if Wealth less than 390,000 EUR)
SUB-TOTAL BASE 152.533,64
   
Reduction Grupo II -15.956,87
SUB TOTAL 136.576,77
Up to 120000 15.600,00
Rest till the Subtotal 18,70% 3.099,86
TOTAL TO PAY 18.699,86

Case 1 and 2, inheritors will not over pass the minimum of exemption iof 325.000 GBP in UK. So, after pay the Spanish IHT, they will not pay IHT in UK.

 

1 Response

  1. terry allen

    My wife and I own a property in spain Approx value E 130,000. We live in Ireland. We have 3 sons one in canada and 2 in england.We would like to arrange if either one of us die the property transfers to the other and if we both die the property transfers equally between our sons. we know of one method via a Ltd Company ownership. Is this the best method and if so could you let me have costings of same or if you have any other suggestions please advise with costings.

    Terry Allen

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