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Inheritance Tax DeductionsIn Murcia
This presentation has been updated and is valid for 2014.
Inheritance Law in Murcia
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There are special regional tax deductions and exemptions
passed by the local government in Murcia that only apply to
those beneficiaries who have been resident in the region.
Inheritance Law in Murcia
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If you have NOT been resident in Murcia then, when
determining your inheritance tax liability, you may only apply
the deductions and exemptions approved by the CENTRAL
government.
Inheritance Law in Murcia
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The central government exemptions and deductions are not
as generous as the regional exemptions.
This has caused complaints that the inheritance tax laws in
Spain are discriminatory against non-residents.
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Inheritance Law in Murcia
The regional level deductions available in Murcia were
enacted by the parliament in Cartagena and in their current
form are specified in Legislative Decree1/2010. as modified
by Ley 3/2012
The most important changes to State laws can be
summarised as follows:
Inheritance Tax Law in the Murcia
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Spanish Inheritance law first assigns beneficiaries to groups according to the degree of kinship with the deceased:
Group I Children, including adopted children, under the age of 21
Group II All other descendants, spouses and parents
Group III Close relatives such as brothers and sisters, grandparents,
aunts and uncles
Group IV More distant relatives
Personal Exemptions
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These are the personal deductions as amended by regional law in Murcia. They are in addition to state exemptions:
Personal Exemptions
Deduction
Group I Deduction of 99% up to €300,000
Group II Deduction of 99% up to €300,000
Group III No deductions available
Group IV No deductions available8
If the beneficiary is disabled:
If a Group I or II beneficiary is disabled then the 99%
deduction is applicable up to €450,000
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Deductions in transfer of Family Business
Tax deduction of 99% of the value of the business
Must be a sole trader or 'single director company'
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Deductions in transfer of Family Business
The participation of the deceased in the business must
have been at least 10% (or 20% when combined with
participation of the spouse)
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Deductions in transfer of Family Business
The business may not be sold for a period of no less than
5 years
The registered address of the company must remain in
Murcia for a period of 5 years
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State Level Tax deductions
As these are the only special deductions that have been created
by the region of Murcia it is necessary to consider State level tax
deductions
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State Level Tax deductions on income from Life Insurance:
An exemption of all tax on income up to €9,195,45
Available where the beneficiary is the spouse, parent or
descendent or adopted descendent
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State Level Tax deductions on income from Life Insurance cntd:
The exemption is available to each beneficiary but only once
regardless of number of life insurance policies
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State Level Tax deductions on Family Home
If the main, habitual family home is inherited there is a deduction
of 95% up to the value of €122,606 per beneficiary.
This applies to beneficiaries that are the spouse, child or parent
of the deceased.
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State Level Tax deductions on Family Home cntd
The property may not be sold for a further 10 years after the
inheritance.
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State Level Tax deductions on Family Home cntd
More distant relatives may also benefit from this exemption but
must have been living with the deceased in the property for a
period of at least two years prior to the date of death.
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Other Deductions:
As a general rule the following deductions may be made on any estate:
Funeral Expenses
Final Medical Expenses of the Deceased
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Other Deductions Cntd:
Debts held be the deceased that are evidenced by public
documents e.g. a mortgage
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Tax Rates in Murcia
Taxable Sum
Tax Payable On This Sum
Any Remainder Up To
Applicable Rate on Remainder (%)
0 0 7993,46 7,65
7993,46 611,5 7987,45 8,5
15980,91 1290,43 7987,45 9,35
23968,36 2037,26 7987,45 10,2
31955,81 2851,98 7987,45 11,05
39943,26 3734,59 7987,46 11,9
47930,72 4685,1 7987,45 12,75
55918,17 5703,5 7987,45 13,6
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Tax Rates in Murcia Cntd...
Taxable Sum
Tax Payable On This Sum
Any Remainder Up To
Applicable Rate on Remainder (%)
63905,62 6789,79 7987,45 14,45
71893,07 7943,98 7987,45 15,3
79880,52 9166,06 39877,15 16,15
119757,67 15606,22 39877,16 18,7
159634,83 23063,25 79754,3 21,25
239389,13 40011,04 159388,41 25,5
398777,54 80655,08 398777,54 29,75
797555,08 199291,4 And Above 34
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Existing Wealth
Once the relevant tax rate has been applied the result is multiplied by a coefficient determined by the existing wealth of the beneficiary as well as the group to which they belong:
Existing Wealth Groups/Coefficient
(In Euros) I & II III IV
0 to 390,657 1 1.59 2
390,657 to 1,965,309 1.05 1.67 2.1
1,965,309 to 3,936,629 1.1 1.75 2.2
More than 3,936,629 1.2 1.91 2.423
Existing Wealth
The Groups referred to consist of the following beneficiaries:
Group I Children, including adopted children, under the age of 21
Group II All other descendants, spouses and parents
Group III Close relatives such as brothers and sisters, grandparents,
aunts and uncles
Group IV More distant relatives
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Each year in Spain thousands of expats pay more
tax on inheritance than they should – simply
because they fail to follow some simple rules.
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To find out how to get expert advice, in English, about how to
reduce your liability for inheritance tax, go to:
Expert Probate Services in Murcia
Expert Probate Services in Murcia
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