Many will not be aware that a new government of the region of Valencia started ruling in the Autumn of last year and they suggested they are going to erase all the allowances for gifting and probates. This will mean a lot of people will pay considerably more inheritance or gifting tax in the future. We are trying to arrange as many donations as possible before the changes are made. Clients should be aware that although this costs in excess of 4,000€ it may (we can advise on particular circumstances) save them a great deal of money in the future. Spanish Solutions can arrange donations all over Spain in any area and non-residents do not need to come to Spain to arrange this.
Gifting a Property – Tax Free Allowances
Each child (children of the property owners but adults) gets a 100,000€ tax free allowance at the present time in the Valencia region. This generally means that a property can be passed onto the next generation with little or usually no inheritance tax. It is not possible to get better ever than no inheritance tax.
Recent Proposed Tax Changes
The government have been indicating that they are intending to reduce significantly or erase tax allowances in the Valencia region.
Thus it has led to a lot of people thinking we will pass on the property into our childrens’ names, with minimal expense. (There are still going to be notary fees, land registry fees, solicitor fees and some other small expenses but there will always be these costs, now with gift, or in the future with an inheritance. The difference is that we do not know how much inheritance tax you will pay in the future. However, almost certainly a lot more.
Gifting to my spouse
I am worried about something happening to me, can I gift to my spouse?There are no tax free allowances for gifts or donations between spouses in the Valencia region. For changes of ownership such as when a couple are divorcing or two business partners are going separate ways there is a method of division of property ownership whereby only stamp duty and expenses are paid. But this would not be the best route if you have children to pass the property on.
What Can Be Done now?
Currently, with everything on hold except essential matters, it is the best time to discuss matters and arrange paperwork. Then as soon as lockdown is lifted we can arrange powers of attorney for a gift to children, or as an alternative, Spanish Wills.
Bear in mind that someone passes away, if they have assets in Spain a probate will need to be done to be pass assets on, even to a spouse. It is not automatic. Also any inheritance tax has to be paid within six months. It is therefore best to contact a solicitor fairly quickly after a death. It is wise to make a Spanish Will as it saves hassle and expense. We are currently organising a waiting list for these to be signed.
As now is a good time in the Valencia region to consider donating a property to your adult children, we are happy to calculate the costs free of charge.
Please contact us if you would like to enquire about gifting a property in Spain to adult children or making a Spanish Will.
106 Comments
Cezary
Hello! I am not a Spanish resident and I wonder if it is possible to use the 100k allowance to non-resident children. I would like to donate a fraction of my property, for example 2 x 33%, to my 2 children who are just 5 years old.