If you have assets in Spain, it is important to understand the regulations in Spain regarding inheritance and donations. A donation is a lifetime inheritance or gift of an asset or assets and as such may be liable to tax.
We can only give you a brief picture of the situation currently in the Valencia region, as each area independently dictates their tax, and we must stress that this can change at any time in the future. In the Valencia Community we expect a change to tax allowances before the end of the year, either by reducing them or erasing them.
Currently, however, Spanish Residents are liable to inheritance tax or ISD (Impuesto sobre Sucesiones y Donaciones) on receipt of an inheritance or gift wherever in the world it is situated. Paid where the assets are situated.
Non residents are liable to ISD on receipt of a gift or inheritance only on property that is situated in Spain.
Property can be land, buildings, residential or commercial properties or any other asset including shares in registered or private companies, cash, cars and personal goods and chattels.
Tax is payable within three months and if not settled within six months may incur penalties plus interest.
Tax is levied on the recipient and the best allowances are only for fathers, mothers, grandparents, children and grandchildren (straight up and down ascendants and descendants).
Determining the amount of the liability requires detailed calculations and Spanish Solutions can assist with this. Please contact us if you would like to know more regarding donating a property to your children for example. Now that allowances are much more generous in this region, many people are choosing this option, but it depends on the value of the asset/s.