Find out how to reduce inheritance tax deductions in Alicante

1. Inheritance Tax Deductions
in Alicante Province

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 acting.
Inheritance Law in Alicante Province
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3. In 2001 the Spanish Government devolved the power to set
inheritance tax rates and deductions to the regional
parliaments.
Inheritance Law in Alicante Province
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4. However, many enacted tax laws which applied deductions
and exemptions only to those who have been resident in the
region over the balance of the previous five years.
Inheritance Law in Alicante Province
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5. On September 3rd 2014, the European Court of Justice ruled
that preferential deductions for long-term residents was
discriminatory and contrary to European Law.
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Inheritance Law in Alicante Province

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.
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Inheritance Law in Alicante Province

7. The main impact of the new legislation is as follows:
1) If the deceased who had assets in Spain 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.
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Inheritance Law in Alicante Province

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.
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Inheritance Law in Alicante Province

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.
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Inheritance Law in Alicante Province

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 Law in Alicante Province
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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
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12. The following are the personal exemptions available in
Alicante :
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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. 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%.
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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
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15. Deductions in transfer of Family Business
Tax exemption of 95% of the value of the business
Must be children or spouse to inherit to benefit from the
deduction
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16. Deductions in 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
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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%.
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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%.
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19. State Level Tax deductions on 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
descendent or adopted descendent
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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
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21. 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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22. Other Deductions Cntd:
Debts held be the deceased that are evidenced by public
documents e.g. a mortgage
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23. Once the final amount of tax payable is determined then it
is necessary to apply the relevant rate:
Inheritance Tax Rates in Alicante Province
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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 in Alicante Province
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25. Tax Rates in Alicante Province
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
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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
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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
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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 Alicante Province
Expert Probate Services in Alicante
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