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Inheritance Tax Deductions
in the Valencia Region
This presentation has been updated and is valid for 2017.*
*Advocate Abroad does not accept responsibility for losses of a...
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 the Valencia Region
were enacted by the Valencia parliament and in their current
f...
Spanish Inheritance law first assigns beneficiaries to groups
according to the degree of kinship with the deceased:
Group ...
The following are the personal exemptions available in the
Valencia Region :
12
Deduction
Group I Exemption of €100,000 pl...
If the beneficiary is disabled:
An exemption of €120,000, rising to €240,000 additional to
any personal exemption if menta...
Inheritance of the Family Home
Exemptions exist for child, parent and spouse of the
deceased with a value up to 95% of val...
Deductions: Transfer of Family Business
Tax exemption of 95% of the value of the business
Should be children or spouse to ...
Deductions: Transfer of Family Business
If no child or spouse any relative 'to third degree of
consanguinity' may benefit ...
Additional Discounts
A 75% discount shall be applied to any resulting tax
payable by those beneficiaries who are in Group ...
Additional Discounts
A 50% discount shall be applied to any resulting tax
payable by those beneficiaries who are in Group ...
State Level Tax deductions on income from Life
Insurance:
An exemption of all tax on income from a life insurance policy u...
State Level Tax deductions on income from Life
Insurance:
The exemption is available to each beneficiary but only once
reg...
Other Deductions:
As a general rule the following deductions may be made on
any estate:
Funeral Expenses
Final Medical Exp...
Other Deductions Cntd:
Debts held be the deceased that are evidenced by public
documents e.g. a mortgage
22
Once the final amount of tax payable is determined then it
is necessary to apply the relevant rate:
Tax Rates the Valencia...
Taxable Sum Tax Payable
On This Sum
Any Remainder
Up To
Applicable Rate on
Remainder (%)
0 0 7993,46 7,65
7993,46 611,5 76...
Tax Rates the Valencia Region
Taxable Sum Tax Payable
On This Sum
Any Remainder
Up To
Applicable Rate on
Remainder (%)
626...
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...
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 Valencia Region

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Inheritance Tax Valencia Region

  1. 1. Inheritance Tax Deductions in the Valencia Region
  2. 2. This presentation has been updated and is valid for 2017.* *Advocate Abroad does not accept responsibility for losses of any type consequent upon reliance on the information contained in this presentation. Please consult a lawyer before taking any action. Inheritance Law in the Valencia Region 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 the Valencia Region 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 the Valencia Region 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 the Valencia Region
  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 the Valencia Region
  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 the Valencia Region
  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 the Valencia Region
  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 the Valencia Region
  10. 10. The regional level exemptions available the Valencia Region were enacted by the Valencia parliament and in their current form are specified in Law 13/1997. Inheritance Tax Law the Valencia Region 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 Exemptions 11
  12. 12. The following are the personal exemptions available in the Valencia Region : 12 Deduction Group I Exemption of €100,000 plus €8,000 per year under the age of 21 up to a maximum of €156,000. Group II Exemption of €100,000 Group III No deductions available Group IV No deductions available
  13. 13. If the beneficiary is disabled: An exemption of €120,000, rising to €240,000 additional to any personal exemption if mental disability > 33% or physical > 65%, with gravity of disability increasing on a scale from 0% up to 100%. 13
  14. 14. Inheritance of the Family Home Exemptions exist for child, parent and spouse of the deceased with a value up to 95% of value up to max of €150,000 14
  15. 15. Deductions: Transfer of Family Business Tax exemption of 95% of the value of the business Should be children or spouse to inherit to benefit from the deduction 15
  16. 16. Deductions: Transfer of Family Business If no child or spouse any relative 'to third degree of consanguinity' may benefit from exemption Must maintain business for a period of no less than 5 years 16
  17. 17. Additional Discounts A 75% discount shall be applied to any resulting tax payable by those beneficiaries who are in Group I. Similar discount for those with physical disabilities > 65% or psychological > 33%. 17
  18. 18. Additional Discounts A 50% discount shall be applied to any resulting tax payable by those beneficiaries who are in Group II. Similar discount for those with physical disabilities > 65% or psychological > 33%. 18
  19. 19. State Level Tax deductions on income from Life Insurance: An exemption of all tax on income from a life insurance policy up to €9,195,45 Available where the beneficiary is the spouse, parent or descendant or adopted descendant 19
  20. 20. State Level Tax deductions on income from Life Insurance: The exemption is available to each beneficiary but only once regardless of number of life insurance policies 20
  21. 21. Other Deductions: As a general rule the following deductions may be made on any estate: Funeral Expenses Final Medical Expenses of the Deceased 21
  22. 22. Other Deductions Cntd: Debts held be the deceased that are evidenced by public documents e.g. a mortgage 22
  23. 23. Once the final amount of tax payable is determined then it is necessary to apply the relevant rate: Tax Rates the Valencia Region 23
  24. 24. Taxable Sum Tax Payable On This Sum Any Remainder Up To Applicable Rate on Remainder (%) 0 0 7993,46 7,65 7993,46 611,5 7668,91 8,5 15662,38 1263,36 7831,19 9,35 23493,56 1995,58 7831,19 10,2 31324,75 2794,36 7831,19 11,05 39155,94 3659,7 7831,19 11,9 46987,13 4591,61 7831,19 12,75 54818,31 5590,09 7831,19 13,6 Tax Rates the Valencia Region 24
  25. 25. Tax Rates the Valencia Region Taxable Sum Tax Payable On This Sum Any Remainder Up To Applicable Rate on Remainder (%) 62649,5 6655,13 7831,19 14,45 70480,69 7786,74 7831,19 15,3 78311,88 8984,91 39095,84 16,15 117407,71 15298,89 39095,84 18,7 156503,55 22609,81 78191,67 21,25 234695,23 39225,54 156263,15 25,5 390958,37 79072,64 390958,37 29,75 781916,75 195382,76 En adelante 34 25
  26. 26. 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: Pre-existing Wealth Groups In Euros I y II III IV From 0 a 390.657,87 1 1,5882 2 From 390.657,87 to 1.965.309,58 1,05 1,6676 2,1 From 1.965.309,58 to 3.936.629,28 1,1 1,7471 2,2 More than 3.936.629,28 1,2 1,9059 2,4 26
  27. 27. 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 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 the Valencia Region Expert Probate Services in Valencia 28

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