The document discusses inheritance tax deductions and exemptions in Alicante Province, Spain in 2014. Key changes include an increased personal exemption of €100,000 for Group I beneficiaries (children under 21), and €100,000 exemption for Group II beneficiaries (other descendants and spouses). There is also a 95% deduction on the value of a family home up to €150,000 for specified beneficiaries. The deductions available in Alicante are more generous than those approved by the central Spanish government for non-residents.

1. Inheritance Tax Deductions
Alicante Province

2. Inheritance Law in Alicante
This presentation has been updated and is valid for 2014.
Changes in 2014:
1. Increase of personal exemption from 40,000€ to
100,000€ for Group I beneficiaries + 8,000€ for each year
under 21 (up to a max. of 156,000€)
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3. Inheritance Law in Alicante
This presentation has been updated and is valid for 2014.
Changes in 2014:
2. Group II deduction increases to 100,000€
3. 95% deduction of value of family home up to a value of
150,000€ for specified beneficiaries
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4. Inheritance Law in Alicante
There are special regional tax deductions and exemptions
passed by the regional government in Valencia that only
apply to those beneficiaries who have been resident in the
region.
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5. Inheritance Law in Alicante
If you have NOT been resident in the Valencia region then,
when determining your inheritance tax liability, you may only
apply the deductions and exemptions approved by the
CENTRAL government.
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6. Click On The Following Link For Ideas on
How to Reduce Your Inheritance Tax:
8 Steps That Could Dramatically Reduce Your
Spanish Inheritance Tax Bill
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7. Inheritance Law in Alicante
The central government exemptions and deductions are not
as generous as the regional exemptions.
This has caused complaints that the inheritance tax laws in
Spain are discriminatory against non-residents.
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8. Inheritance Tax Law in Alicante
The regional level exemptions available in Alicante were
enacted by the Valencia parliament and in their current form
are specified in Law 13/1997.
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9. Personal Exemptions
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
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10. The following are the personal exemptions available in
Alicante:
Deduction
Group I Exemption of €100,000 plus €8,000 per year under the age of 21 up
to a maximum of €156,000. A further reduction of 75% for this
group if residents as per legal definition.
Group II Exemption of €40,000. A further reduction of 75% for this group if
residents as per legal definition.
Group III No deductions available
Group IV No deductions available
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11. If the beneficiary is disabled:
An exemption of €240,000 additional to any personal
exemption if mental disability > 33% or physical > 65%.
A discount of 99% is applied to any inheritance tax payable
by any beneficiary with a physical disability > 65% or
mental disability > 65% 11

12. Deductions in 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
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13. 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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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 per beneficiary
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15. 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
descendent or adopted descendent
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16. 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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17. 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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18. Other Deductions Cntd:
Debts held be the deceased that are evidenced by public
documents e.g. a mortgage
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19. Tax Rates in Alicante
Once the final amount of tax payable is determined then it
is necessary to apply the relevant rate:
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20. Tax Rates in Alicante
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
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21. Tax Rates in Alicante
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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22. 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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23. 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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24. Probate Services in Alicante
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
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