Inheritance Tax Deductions Castilla La Mancha


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Spanish Inheritance Tax

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Factors that determine Inheritance Tax in Castilla La Mancha tax exemptions (if any) tax rates the wealth of the beneficiary the proximity of the relation between testator and beneficiary

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Tax Exemptions in Spain are available at either State or Regional Level. The Regional level exemptions are typically more generous than the equivalent State level tax breaks but usually require residence in the region for a period of years prior to the inheritance to benefit from the additional deductions. If regional law does not grant any tax deductions on a particular asset class then recourse may be had to any State level exemptions that exist. Inheritance Tax in Spain

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We first must consider the various deductions that are applicable. The regional tax exemptions available in Castilla La Mancha were encacted by the Toledo parliament and in their current form are specified in Ley 09/2008. Ley 09/2008 greatly simplified the succession laws in Castilla La Mancha and may be summarised as follows:

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For those beneficiaries categorised within Group I or II: A deduction of 95% on any tax payable on account of an inheritance The Group to which a beneficiary is assigned is determined as follows:

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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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State Deductions At the state level various reductions are available which may be relevant

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State Level Tax deductions on income from Life Insurance: An exemption of all tax on income up to €9,195,45 Available where the beneficiary is the spouse, parent or descendent or adopted descendent The exemption is available to each beneficiary but only once regardless of number of life insurance policies

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Deductions in transfer of Family Business Tax deduction of 99% of the value of the business May be children, spouse or any relative 'to third degree of sanguinity' who may benefit from the deduction Must maintain business for a period of no less than 5 years

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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 the final amount of tax payable is determined then it is necessary to apply the relevant rate. The rates applicable can be downloaded here: Tax Rates Castilla la Mancha

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Existing Wealth Once the relevant tax rate has been applied the resulting amount is multiplied by a coefficient which is determined by the existing wealth of the beneficiary as well as the group to which they belong:

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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 how to deal with such issues as... The immediate steps to take when dealing with an Inheritance. How to manage an inheritance in Spain with a non-Spanish will.

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As well as... The difference between State and regional tax exemptions. How to reduce your inheritance tax bill in Spain.

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And much, much more! Download the myAdvocate Spain guide to Inheritance Tax in Spain by clicking on: Spanish Inheritance Tax

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If you need legal advice in Spain but are concerned about dealing with lawyers about which you have little or no background information, then get peace of mind at no additional cost by using the: 'Look before you leap' Lawyer Verification System myAdvocate Spain™

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More information and contact: [email protected] Tel. +34 931 845 073