Possible Change to Inheritance/DonationTaxes

Since 2015, property owners in the Murcian and Valencian regions of Spain have been in a much better
position with respect to inheritance and donation tax.

We strongly suspect that the law is going to change with effect from late 2019 and wish to inform anyone considering changing their property into the names of their children to do it now, which means starting the process now as quickly as possible.

Inheritance or Donation, what is better?

We cannot guarantee the law will change but we do suspect that the tax allowances will worsen considerably if not disappear. There has been a great deal in the news about this and the recently sworn in Spanish government have said this is what they are going to do (erase or reduce considerably). Our senior solicitor advised “The region of Valencia elected the new government which will start ruling by July/August, maybe September.  The new government was the one suggesting to erase all the allowances for donations and probates. Therefore, we should try to complete the outstanding donations and we should inform clients about this possibility”.

In 2015 the regional government of Murcia ruled that there would be a discount of 50% to donations and inheritance tax for spouses, children and parents. This was raised in 2017 to 60%, and also 99% for beneficiaries who had large families (those with 5 or more children).

Last year the Murcian region agreed a 99% discount on inheritance tax with effect from 1/1/18 for spouses, children and parents.

There is a minimum exemption of 16,000 euros in the case of inheritances. Thus a 16,000€ inheritance is free of charge of tax anyway for small inheritances.

Valencia currently has a tax-free allowance for donations to children of 100,000€ each and for spouses and children for inheritance.

How To Inherit Paying Barely Any Tax

This means that currently in Valencia and Murcia regions, it is now possible to inherit or receive a gift of property or money for example from your parents without paying barely any tax.

We have been advising clients with property both regions this year to make the most of a favourable tax regime to donate property to adult children now if they feel it appropriate (as clearly you cannot get much better than passing on assets with no tax or barely any tax).

Inheritance or Donation, Our Recommended Action

Given we expect the law to change if you have paid something towards changing the ownership of your property to your children, or had been thinking about it, please do not delay further. In addition, there is also a problem due to Brexit, which we can explain further on email.  It could cost your family a great deal of money in the future.

What you need to do to Save Money in Inheritance Taxes

If you wish us to quote for a donation to your children for your property, we only need a copy of our deeds and your SUMA/IBI bill and can explain very quickly and clearly what needs to be done and provide you with the costs (there will always be for inheritance or an early inheritance: notary fees, land registry fees, solicitor fees, and some other small minor costs).

Please contact us as soon as possible regarding inheritance or donation so we can explain.