Inheritance tax

Information and questions about the Law in Spain and Andalucia.
sunspot
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Inheritance tax

Postby sunspot » Tue Jul 30, 2019 11:26 am

Non resident, living in UK and making enquiries into inheritance tax... a lawyer has told me that Andalucia has changed the law on gifting, via a form called SITAR, but that this will not apply to UK residents post Brexit. Does anyone have information on this, or any other aspects of Inheritance Tax... I read elsewhere that the threshold in Andalucia is now 1 million Euros before tax for residents / non residents - if so do we need to do anything - our property is worth a lot less than this :lolno:

Is the inheritance tax the same as death duties, and would it be payable on one spouse's death - apparantly the lawyer is saying that doing a SITAR means the property will pass directly to the children (one still a minor by a few months at Brexit which the lawyer says causes complications and costs as I need some legal documents from UK confirming gift within UK law!!). However, if less than 1 million euros value, would there be anything to pay and therefore should I just do nothing? I am so confused by what to do..... we have no plans at the moment to become Spanish residents. Thanks for any help xx

El Cid
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Re: Inheritance tax

Postby El Cid » Tue Jul 30, 2019 11:41 am

After a no deal Brexit there could be very serious problems for UK residents receiving inheritances or gifts from Spanish residents.

All the special regional allowances only apply to residents of the EU/EEA, so the only allowances are the state allowances, which for children, spouses etc are only €16k.

Sid

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Re: Inheritance tax

Postby Beachcomber » Tue Jul 30, 2019 12:10 pm

I checked only yesterday with the gestor in Madrid through whom non-resident inheritances are handled on behalf of AEAT and he insisted that, although the previous allowance was restricted to citizens of EU member states, as far as the one million euros allowance is concerned the only criterion is that the property is located within Andlaucía and that the fiscal status and fiscal residence of both the deceased and the inheritors is irrelevant.

To quote him it is governed by:

"La ley Tributaria de la Comunidad Autonoma donde realice el inmueble y es global. Da igual donde vive."

I know that is not what it says on some third party advisory web sites (it probably does not sit well with their anti-Brexit rhetoric) but this is straight from the horse's mouth so who am I to argue especially as they deal on a daily basis with inheritances on behalf of inheritors of Spanish properties worldwide not just within the limited confines of the EU.

sunspot
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Re: Inheritance tax

Postby sunspot » Tue Jul 30, 2019 12:38 pm

Thanks so much for this information.... and thankyou Beachcomber for clarifying the £1 million situation. That is a relief because if I were to gift the house to the children, then it would only be for that property and we would lose the benefit if we ever sell it to move closer to facilities - we are out in the Campo with the need to drive. So would this £1 million allowance cover the first spouse's death or would there be other taxes that kick in at that point. Morbid I know, but useful to know the facts. Thanks.

Beachcomber
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Re: Inheritance tax

Postby Beachcomber » Tue Jul 30, 2019 12:52 pm

The one million euros allowance is between spouses and their (legitimate) children. The only expenses are for notary and property registry fees. The same gestor told me that it does not apply to donations and I have to say that I have never heard of SITAR except in the context of it being a musical instrument.

El Cid
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Re: Inheritance tax

Postby El Cid » Tue Jul 30, 2019 12:57 pm

That's very good news. Does that imply that it does not necessarily apply to regions other than Andalucia?

Sid

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chrissiehope
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Re: Inheritance tax

Postby chrissiehope » Tue Jul 30, 2019 1:11 pm

SITAR stands for Spanish Inheritance Tax Assessment Report
Alexandr for President (Squire for PM !)

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sunspot
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Re: Inheritance tax

Postby sunspot » Tue Jul 30, 2019 1:13 pm

As I understand it from the information from the lawyer, SITAR is a form to start the process of gifting a property (or other assets) since the change in law in Andalucia - apparently the EU has ruled that gifting should apply to all EU nationals, not just residents in Andalucia. Hence the rush before Brexit, although I suppose it may become invalid once we are no longer EU citizens (although Lawyer guarantees otherwise). After that, there are the Notary and registration costs - a total of about 1700 euros, plus a legal document in UK, so not a cheap option, and only applicable to the property or assets named. Useful for estates worth in excess of 1 million euros, but probably just a lawyer hoping to make a quick buck in our case with a much lower value property and no other assets?!!

El Sid, you mentioned the threshold of £16k - I think this may be to other regions who don't have the 1 million exemption? I had heard of both, but needed clarification as to who was eligible, so thankyou everyone. Good news!!

Beachcomber
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Re: Inheritance tax

Postby Beachcomber » Tue Jul 30, 2019 1:50 pm

I was not aware that gifting was restricted to residents only and the one million euro allowance applies only to inheritances anyway. It does not apply to donations either for residents or non-residents. And if SITAR means Spanish Inheritance Tax Assessment Report what has that go to do with donations?

Sid, I think the law refers back to the provisions of the individual autonomous community concerned.

Beachcomber
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Re: Inheritance tax

Postby Beachcomber » Tue Jul 30, 2019 3:41 pm

Well, no wonder I had never heard of 'SITAR'! This is not some kind of new official procedure introduced by the Junta de Andalucía in respect of inheritances and donations which I thought I had missed it seems to be just a money making scheme dreamt up by a bunch of lawyers who will offer to draw up a report on your inheritance tax situation, at a price. In one place I have seen, a price of well in excess of €700.

Go down that road if you wish but, personally, I would prefer to do my own research and prepare my own assessment at a cost of only a few hours of my time.

elusive
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Re: Inheritance tax

Postby elusive » Tue Jul 30, 2019 4:00 pm

I guess the suns gone to my head but wht is the O.P trying to do? Sign their spanish property over to their kids to avoid any possible IHT?

Or are they just wanting their % left to their kids on death instead of their spouse

katy
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Re: Inheritance tax

Postby katy » Tue Jul 30, 2019 5:14 pm

Thanks for asking that Elusive as I am confused too. I keep seeing the word "gifting".

sunspot
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Re: Inheritance tax

Postby sunspot » Tue Jul 30, 2019 5:16 pm

I asked my lawyer about the million pound exemption, and asked him to explain what the benefit would be of doing the SITAR with him.... this was his response... he said I was incorrect in my information and that I was confusing the requirements to benefit from the tax relief in Andalucia. He stated the 1mn is a tax relief reserved ONLY for EU/EEA residents. After Brexit UK non resident citizens will not qualify for this tax relief.

Is he just saying that to get my business - from what Beachcomber says from a reliable source, this is not the case at all and UK citizens and all other foreigners will still qualify. I tend to favour the Madrid lawyer, as he is neutral. The lawyer I have been in touch with is connected with one of those 3rd party websites that Beachcomber mentioned, so I am dubious. Unlikely I could do anything in the timescales (UK document for a minor) as we travel out at the weekend for several weeks. THanks for your help everyone, just thought I would give you this feedback.. sticking with your advice though as I think this lawyer is just seeing £££££

In reply to elusive, just wanting to avoid extra inheritance tax if there was really a chance to do something before we lose our EU status with Brexit. Also have seen the devastation that death duties have done to families first hand, wanting to minimise that in the event something happens to one of us. It sounds to me like a trust, although the lawyer assures me it is not???
Last edited by sunspot on Tue Jul 30, 2019 5:35 pm, edited 1 time in total.

katy
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Re: Inheritance tax

Postby katy » Tue Jul 30, 2019 5:18 pm

I would be guided by Beachcomber.

Beachcomber
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Re: Inheritance tax

Postby Beachcomber » Tue Jul 30, 2019 8:11 pm

Not being one to take these things at face value and in the face of contradictory information from several third party websites I have been researching this matter.

The most authoritative web site that I can find to which to provide a link is the official site of Spanish Notaries and Registrars in an article by Javier Máximo Juárez González:

https://www.notariosyregistradores.com/ ... unitarios/

I believe the salient point to be that shown under:

2- CONSULTA DGT V3151-18, DE 11/12/2018.

particularly the Paragraph called 'Tercera' which is actually the fourth paragraph.

I also believe this to be the section to which my contact in Madrid was specifically referring although he did not give me the actual reference.

I would be grateful if anyone who has the wherewithal and inclination to read, digest and comment on this kind of Spanish legalise could read the article and give their own opinion.

My Madrid contact has my 100% confidence but this matter is so important that other opinions would be very welcome.

elusive
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Re: Inheritance tax

Postby elusive » Tue Jul 30, 2019 8:19 pm

Thanks for confirming sunspot.

Link from blevinfranks regarding court ruling that non E.U cant be discriminated against.

https://www.blevinsfranks.com/news/arti ... -residents

Beachcomber
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Re: Inheritance tax

Postby Beachcomber » Tue Jul 30, 2019 9:16 pm

Thanks for the link. I am not a great fan of those people but the article does confirm my information and helps to debunk the misinformation eminating from numerous other sources.


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