Inheritance Tax Deductions
In Cataluña
This presentation has been updated and is valid for 2015. *
*myAdvocate Europe Ltd does not accept responsibility for loss...
In 2001 the Spanish government devolved the power to set
inheritance tax rates and deductions to the regional
parliaments....
Most regions enacted tax laws that applied generous
deductions only to those beneficiaries who were resident in
the region...
Recently, on September 3rd 2014, the European Court of
Justice ruled that such laws were discriminatory and contrary
to Eu...
Accordingly, the Spanish government has enacted new
legislation (Ley 26/2014) which makes any deductions that
may be appli...
The main impact of the new legislation is as follows:
1) If the deceased was a non-resident, living in another
European co...
2) If none of the assets to be inherited are located in Spain,
then the resident beneficiaries should apply the legislatio...
3) If the deceased was resident in one of the Spanish regions
and the beneficiaries were non-resident, and living in anoth...
The regional level exemptions available in Cataluña were
brought into force by the Barcelona parliament and in their
curre...
Spanish Inheritance law first assigns beneficiaries to groups
according to the degree of kinship with the deceased:
Group ...
The following are the additional deductions available in
Cataluña:
Personal Deductions
12
Deduction
Group I Deduction of €...
Where an heir is disabled:
In addition to any personal deductions applicable a
beneficiary who is disabled may add an addi...
Where the beneficiary is over 75 years old
A deduction of €275,000 may be applied where the heir is
over 75 years of age w...
Inheritance of the Family Home:
Where a property inherited is the main family home then a
reduction amounting to 95% of th...
Inheritance of the Family Home:
The property may not be sold for a period of 5 years if the
exemption is taken advantage o...
Deductions available for the Inheritance of the
Family Business
A tax deduction of 95% of the value of the interest held b...
Deductions available for income from Life
Insurance Policies
A deduction of 100% is applicable on any income from a life
i...
Special Deductions - Spouse
After applying the aforementioned deductions a discount of
99% shall be applied to any tax pay...
Special Deductions – Other
Relatives Groups I & II
20
For Group I & II beneficiaries, apart from the spouse, the
following...
Special Deductions – Other
Relatives Groups I & II
21
Taxable amount Discount Applied % Remaining taxable amount
Marginal ...
Special Deductions – Other
Relatives Groups I & II
22
The discount shall be reduced by 50% should the
beneficiary apply an...
Once all deductions have been applied the final amount of tax
payable is determined then it is necessary to apply the rele...
Tax Rates in Cataluña
24
Taxable
Sum
Tax Payable On
This Sum
Any Remainder
Up To
Applicable Rate on
Remainder
0 0 €50,000 ...
Existing Wealth
Once the relevant tax rate has been applied the result is
multiplied by a coefficient determined by the ex...
Existing Wealth
The Groups referred to consist of the following beneficiaries:
Group I Children, including adopted childre...
Each year in Spain thousands of expats pay more
tax on inheritance than they should – simply
because they fail to follow s...
To find out how to get expert advice, in English, about how to
reduce your liability for inheritance tax, go to:
Expert Pr...
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Inheritance tax deductions in cataluña

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Discover what inheritance tax deductions are available under law in Cataluña

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Inheritance tax deductions in cataluña

  1. 1. Inheritance Tax Deductions In Cataluña
  2. 2. This presentation has been updated and is valid for 2015. * *myAdvocate Europe Ltd does not accept responsibility for losses of any type consequent upon reliance on the information contained in this presentation.Please consult a lawyer before acting. Inheritance Law in Cataluña 2
  3. 3. In 2001 the Spanish government devolved the power to set inheritance tax rates and deductions to the regional parliaments. Inheritance Law in Cataluña 3
  4. 4. Most regions enacted tax laws that applied generous deductions only to those beneficiaries who were resident in the region over the balance of the previous five years. Inheritance Law in Cataluña 4
  5. 5. Recently, on September 3rd 2014, the European Court of Justice ruled that such laws were discriminatory and contrary to European Law. 5 Inheritance Law in Cataluña
  6. 6. Accordingly, the Spanish government has enacted new legislation (Ley 26/2014) which makes any deductions that may be applied to residents also available to non-residents who are EU citizens. 6 Inheritance Law in Cataluña
  7. 7. The main impact of the new legislation is as follows: 1) If the deceased was a non-resident, living in another European country then the beneficiary may apply those deductions and exemptions provided by the regional government in which the majority of the inherited assets are located. 7 Inheritance Law in Cataluña
  8. 8. 2) If none of the assets to be inherited are located in Spain, then the resident beneficiaries should apply the legislation enacted by the regional government where they are normally resident. 8 Inheritance Law in Cataluña
  9. 9. 3) If the deceased was resident in one of the Spanish regions and the beneficiaries were non-resident, and living in another European Union country, then they may apply those deductions and exemptions available to residents of the region in which the deceased was resident. 9 Inheritance Law in Cataluña
  10. 10. The regional level exemptions available in Cataluña were brought into force by the Barcelona parliament and in their current form are laid-out in Law 19/2010. The most important deductions available are as follows: Inheritance Tax Law Cataluña 10
  11. 11. Spanish Inheritance law first assigns beneficiaries to groups according to the degree of kinship with the deceased: 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 Personal Deductions 11
  12. 12. The following are the additional deductions available in Cataluña: Personal Deductions 12 Deduction Group I Deduction of €100,000 plus €12,000 for each year under 21 years of age up to €196,000 Group II Spouse: €100,000; Child: €100,000; Other Descendants: €50,000; Parents: €30,000 Group III €8,000 Group IV No deductions available
  13. 13. Where an heir is disabled: In addition to any personal deductions applicable a beneficiary who is disabled may add an additional €275,000 deduction if the disability is determined to be > 33% or €650,000 where it is > 65% 13
  14. 14. Where the beneficiary is over 75 years old A deduction of €275,000 may be applied where the heir is over 75 years of age who is a beneficiary within Group II though this deduction is incompatible with earlier deductions 14
  15. 15. Inheritance of the Family Home: Where a property inherited is the main family home then a reduction amounting to 95% of the value of the property up to €500,000 may be made where the beneficiaries are the spouse, child or parent of the deceased 15
  16. 16. Inheritance of the Family Home: The property may not be sold for a period of 5 years if the exemption is taken advantage of. 16
  17. 17. Deductions available for the Inheritance of the Family Business A tax deduction of 95% of the value of the interest held by the deceased in the business. This applies to all beneficiaries who were related to the deceased to the third level of consanguinity and persons in the employ of the business for at least 10 years, among other requirements. 17
  18. 18. Deductions available for income from Life Insurance Policies A deduction of 100% is applicable on any income from a life insurance policy held by the deceased up to a maximum of €25,000 where the beneficiary is the spouse, descendant or parent of the deceased 18
  19. 19. Special Deductions - Spouse After applying the aforementioned deductions a discount of 99% shall be applied to any tax payable by a spouse. 19
  20. 20. Special Deductions – Other Relatives Groups I & II 20 For Group I & II beneficiaries, apart from the spouse, the following discounts may be applied to the calculated amount of tax due, depending on the amount inherited:
  21. 21. Special Deductions – Other Relatives Groups I & II 21 Taxable amount Discount Applied % Remaining taxable amount Marginal Rate of Discount % 0 0 100,000 99 100,000 99 100,000 97 200,000 98 100,000 95 300,000 97 200,000 90 500,000 94.2 250,000 80 750,000 89.47 250,000 70 1,000,000 84.6 500,000 60 1,500,000 76.4 500,000 50 2,000,000 69.8 500,000 40 2,500,000 63.84 500,000 25 3,000,000 57.37 and upwards 20
  22. 22. Special Deductions – Other Relatives Groups I & II 22 The discount shall be reduced by 50% should the beneficiary apply any of the following deductions: • Family Business •Any other deduction to the amount of tax payable except the deduction applicable to the family home
  23. 23. Once all deductions have been applied the final amount of tax payable is determined then it is necessary to apply the relevant rate: Inheritance Tax Rates in Cataluña 23
  24. 24. Tax Rates in Cataluña 24 Taxable Sum Tax Payable On This Sum Any Remainder Up To Applicable Rate on Remainder 0 0 €50,000 7% €50,000 €3,500 €150,000 11% €150,000 €14,500 €400,000 17% €400,000 €57,000 €800,000 24% €800,000 €153,000 And above 32%
  25. 25. Existing Wealth Once the relevant tax rate has been applied the result is multiplied by a coefficient determined by the existing wealth of the beneficiary as well as the group to which they belong: 25 Group/Coefficient I & II III IV 1 1.5882 2
  26. 26. Existing Wealth The Groups referred to consist of the following beneficiaries: 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 26
  27. 27. Each year in Spain thousands of expats pay more tax on inheritance than they should – simply because they fail to follow some simple rules. 27
  28. 28. To find out how to get expert advice, in English, about how to reduce your liability for inheritance tax, go to: Expert Probate Services in Cataluña Expert Probate Services in Cataluña 28

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