Inheritance Tax Deductions in Andalucia

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Inheritance Tax in Spain 2011 Factors that determine Inheritance Tax in Andalucia

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Inheritance Tax Andalucia Being aware of the possible tax deductions available in Andalucia when we come into an inheritance gives us a good idea as to how much of a tax bill we are likely to face.

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Inheritance Tax Andalucia While tax rates and deductions may vary from region to region the factors which determine the tax payable upon inheritance in Andalucia are as elsewhere:

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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 deductions are made available at either the level of the State at the level of the Autonomous Community or region. While the Regional level exemptions are often more generous than the equivalent State level tax breaks they require residence in the region for a period of years prior to the death of the testator to benefit from the additional deductions. Inheritance Tax Spain

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The regional level exemptions available in Andalucia were created by the regional parliament in Seville and are set-out in Decreto Legislativo (Legislative Decree) 1/2009. In Andalucia there are three categories of exemption likely to be of general application:

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Where the heir is disabled: An exemption of 100% is available on any inheritance up to the value of €250,000

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The Family Home: If a family or main home is inherited then a reduction up to 99.99% may be made on it's value The heir in this case should be the spouse or child of the deceased

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Inheritance of the Family Home: Relatives over the age of 65 who had been living with the deceased for a period of two years prior to death may also apply this deduction The property must be held for a period of 10 years

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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 not sell the business for a period of no less than 5 years

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Deductions on income from Life Insurance: Income from any insurance policy held by the deceased is free from tax up to €175,000 The deduction is open to any descendant, parent or spouse with less than €402,678 in personal wealth may benefit from

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Other Deductions that can be made before applying the tax rate: Across Spain a number of expenses are considered to be generally deductable from any estate before considering tax: Funeral Expenses Final Medical Expenses of the Deceased

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Other Deductions Cntd: Debts – such as a mortgage – that are held by the deceased and which are evidenced by public documents

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A number of personal exemptions available across the Spanish regions and Andalucia is no exception. The groups to which these exemptions apply are: 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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The following are the personal exemptions available in Alicante: Deduction Group I A 100% exemption where the estate is valued at less than €175,000 and the pre-existing wealth of the beneficiary is less than €402,678.11 Group II A 100% exemption where the estate is valued at less than €175,000 and the pre-existing wealth of the beneficiary is less than €402,678.11 Group III No deductions available Group IV No deductions available

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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: www.myadvocatespain.com [email protected] Tel. +34 931 845 073

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