GIFT TAX
When gifting assets Inheritance tax calculations are applied to the gifted patrimony with exception of the reductions, which would be non applicable.
The important novelty is that on the resulting quota 99% is bonified if the person who is beneficiary of the gift belongs to one of the following groups.
Group I: Descendants.
Group II: Spouses.
In view of the situation COVID 19 has caused in Spain and the economic consequences of it, we are recommending clients wishing to gift assets (descendants and spouses) to do it before any change in legislation, that will most probably occur as the government will have to increase taxes and will most probably change this bonifications.
INHERITANCE TAX
Inheritance Tax varies depending on the value of the assets, kinship between testator and heir/s, age of the heir/s and the assets the heir/s may already have in Spain.
Please note that location of the assets is enormously relevant as each Autonomous Region in Spain applies different reductions and discounts, the ones shown below are the ones applicable to non-residents in Andalusia.
Non-EU members will have no reductions or discounts
I will briefly set out how this is calculated:
- Starting off with the amount to be inherited the following reductions, which will vary according to kinship and age, may be applied as follows:
Group I: Descendants may reduce 15.956,87 €, plus 3.990,72 € for each year under 21.
Group II: Spouses and Descendants of 21 years and over he may reduce 15.956,87 €
Group III: Direct line, collateral to 2nd and 3rd grade, affinity relatives may reduce 7.993,46 €
Group IV: Others, no reduction
- There is a further reduction to heirs in groups I and II and EU residents, if the inherited estate is under 1,000,000 € and they do not own assets in Spain in excess of 402.678,11 € which will result in a quota of zero.
- From the amount resulting you will apply the rates according to a progressive table of rates detailed
The tax rates vary from 7.65 % to 36.50 %.
| AMOUNT INHERITED – € – | TO BE PAID – € – | EXCESS TO NEXT LEVEL – € – | RATE % |
|---|---|---|---|
| 0,00 | —– | 7.993,46 | 7,65 |
| 7.993,46 | 611,50 | 7.987,45 | 8,50 |
| 15.980,91 | 1.290,43 | 7.987,45 | 9,35 |
| 23.968,36 | 2.037,26 | 7.987,45 | 10,20 |
| 31.955,81 | 2.851,98 | 7.987,45 | 11,05 |
| 39.943,26 | 3.734,59 | 7.987,45 | 11,90 |
| 47.930,72 | 4.685,10 | 7.987,45 | 12,75 |
| 55.918,17 | 5.703,50 | 7.987,45 | 13,60 |
| 63.905,62 | 6.789,79 | 7.987,45 | 14,45 |
| 71.893,07 | 7.943,98 | 7.987,45 | 15,30 |
| 79.880,52 | 9.166,06 | 39.877,15 | 16,15 |
| 119.757,67 | 15.606,22 | 39.877,16 | 18,70 |
| 159.634,83 | 23.063,25 | 79.754,30 | 21,25 |
| 239.389,13 | 40.011,04 | 159.388,41 | 25,50 |
| 398.777,54 | 80.655,08 | 398.777,54 | 31,75 |
- Once this rate has been applied you will have what is called the “quota” and to this amount a further operation must be done, that is multiply this quota by the coefficient in the table set out below, which will vary according to the assets the heir may have in Spain and kinship.
| Assets of heir in EURO | Groups I & II | Group III | Group IV |
|---|---|---|---|
| From 0 to 402.678,11 | 1,0000 | 1,5882 | 2,0000 |
| From more than 402.678,11 to 2.007.380,43 | 1,0500 | 1,6676 | 2,1000 |
| From more than 2.007.380,43 to 4.020.770,98 | 1,1000 | 1,7471 | 2,2000 |
| More than 4.020.770,98 | 1,2000 | 1,9059 | 2,4000 |
