1. SPAIN Inheritance and gift tax

2. INHERITANCE and GIFT TAX

3. contents – SPAIN Basics Taxable persons Fiscal residency/nationality
Spanish inheritance tax regulation
Taxable base for taxpayers or deceased non-residents
Tax basis
Allowances
Tax rates.
Quote multiplier coefficient
Double taxation relief
Agreements exist with the following countries
International double taxation relief.
Trusts / Donations and examples

4. Basics a.a. Taxable persons - Fiscal residency/nationality
Spanish fiscal residence concept
Individuals who remain in Spain for more than 183 days during a calendar year.
Except tax residence certificate in another country.
His main base or centre of activities or economic interest is, directly or indirectly in Spain.
It is presumed the residence in Spain when his spouse-not legally separated and
underage dependent children are permanent residents in Spain.
This concept is applicable also for inheritance tax purposes but the estimation of the 183 days is for the last year period.
Nationality: Individuals of Spanish nationality who prove their new residency in a tax haven, will continue to be deemed residents in Spain for income tax purposes during 5 years. It is not clear if it this presumption is applicable for inheritance and gift tax purposes.

5. Basics
a.b. Taxable persons – Spanish inheritance and gift tax regulation
Spanish Inheritance and gift tax regulation
Taxpayer residence
- Resident: Worldwide income.
Non-resident: Assets located in Spain or rights exercised in Spain.
b) Assets located in Spain:
Real Estate.
Other assets related with real estate located in Spain.
Spanish life insurance.
Rights exercised in Spain (v.g. Spanish company shares).
Foreign residents who opt to pay as a non-residents for income tax purposes also are taxed as a non-resident for Spanish inheritance tax purposes.

6. Spanish Inheritance tax regulation
Basics
a.b. Taxable persons – Spanish inheritance and gift tax regulation
Spanish Inheritance tax regulation
Taxpayer Resident: Autonomous Community (CCAA) regulation.
b) Taxpayer or deceased Non-Resident: Estate regulation.

7. GREEN ZONE: CCAA where there is no taxation or very reduced for inheritance and gift tax.
ORANGE ZONE: CCAA where there is no taxation or very reduced for only inheritance tax.
RED ZONE: CCAA where there is no relevant measures for reducing taxation.
Basics
a.b. Taxable persons – Spanish inheritance and gift tax regulation
Taxpayer resident: Autonomous community disperse regulation

8. 1. Basics
b.a. Taxable base for taxpayers or deceased non-residents-Tax basis
In general, the valuation of the assets is the real value.
Specifics valuations
Real estates: Market Value. Skills for the valuation by Tax Administration:
Expert appraisal
Insurance policy
The value given in other transfer (before or after).
Business assets: Book value.
Shares of corporations and partnerships: The highest of:
Nominal value
Net asset value (except real estate companies)
Capitalized value

9. Spanish personal allowances only for inheritance tax
Basics
b.b. Taxable base - Allowances
Spanish personal allowances only for inheritance tax
Tax class
Categories of beneficiaries
Allowances I
Children, grandchildren, great-grandchildren smaller than 21 years old
+ General: ,87 EUR
+ For each year less that 21 years old of the beneficiary: 3.990,72 EUR
Limit for both concepts: ,59 EUR II
Children, grandchildren, great-grandchildren older than 21 years, spouses and grandparents
III
Siblings, stepchildren, stepparents, parents and children in law, aunts, uncles, nephews and nieces.
+ General: 7.993,46 EUR IV
Others
There is not reduction

10. b.b. Taxable base – Allowances
Basics
b.b. Taxable base – Allowances
Other Spanish allowances:
Tax class
Concept
Allowances
Inheritance tax
Life insurance
100% with the limit of 9.195,49 EUR
Inheritance and gift tax
Shares of family corporations
95% of the net value.
They are different conditions in inheritance and gift tax.
Family Business assets
Habitual residence
Some conditions have to be met.
Inheritance tax and gift tax
Historic patrimony assets
Farm enterprise
50% to 95% of the net value.

11. Inheritance and gift tax
Basics
b.c. Taxable base-Tax rate scale
Inheritance and gift tax
7,65
8,50
9,35
10,20
11,05
11,90
12,75
13,60
14,45
15,30
16,15
18,70
21,25
25,50
29,74
34,00
0,00
611,50
1.290,43
2.037,26
2.851,98
3.734,59
4.685,10
5.703,50
6.789,79
7.943,98
9.166,06
15.606,22
40.011,04
80.655,08
,40
Rest
(%)
Quote (EUR)
Up to (EUR)
0,00
7.993,46
15.980,91
23.968,36
31.955,81
39.943,26
47.930,72
55.918,17
63.905,62
71.893,07
79.880,52
,67
,83
,13
,54
,08

12. (See tax class in personal allowances)
Basics
b.d. Taxable base- Quote multiplier coefficient
Pre-existent wealth
Tax class
I & II
III IV
(See tax class in personal allowances)
From 0 to ,11 EUR
From ,11 to ,43 EUR
From ,43 to ,98 EUR
More than EUR
1,0000
1,0500
1,1000
1,2000
1,5882
1,6676
1,7471
1,9059
2,0000
2,1000
2,2000
2,4000

13. 2. Double taxation relief
a. Agreements with the following countries
Tax treaties covering inheritance tax
Greece
Sweden
France
There is not tax treaties covering gift tax.
b. International double taxation relief: Individual resident who pay for his worldwide
income can deduct to the taxable quote the lower of:
The amount paid in the foreign country.
Spanish tax rate average taking into account all the assets received.

14. 3. Trusts / Donations and Examples
Trusts: In Spain there is not Trust legislation.
Vehicles to avoid inheritance and gift taxation:
To reduce taxation: To set up an active company or a business activity.
To avoid o reduce taxation: being resident in Green or Orange Zone’s CCAA (the individual has to remain in this CCAA during at least 5 years). or in a foreign country

15. 3. Examples
UK resident’s inheritance with a beneficiary resident in Spain:
Application of International double taxation relief in spite of the
taxpayer in both countries is not the same:
In UK are the executors who pay the inheritance.
In Spain is the beneficiary who pay the inheritance.