Providing Best Solutions in a
       framework of Legal Certainty

IMPOSTA DI SUCCESSIONE E DONAZIONE - SPAIN: Andalusia increases inheritance tax exemption

SPAIN: Andalusia increases inheritance tax exemption

The Budget Law for the region of Andalusia contains a proposal for the tax reform of the Inheritance and Gift Tax, which will enter into force in January 2018. The main features of this agreement are:

(i) reduction on the tax relief up to €1,000,000 made to spouses and relatives through Inheritance Tax,

(ii) reduction on the tax relief up to €1,000,000 made to relatives of group I on the Gift Tax, and

(iii) beneficial changes for disabled people on the Inheritance and Gift Tax.

On 20 September 2017, PSOE and Ciudadanos signed an agreement that will reform the Andalusian Inheritance and Gift Tax from 1 January 2018. Whilst the official text is still to be published, the significant aspects of this agreement comprise:

1. Inheritance Tax (Groups I and II):

The amount exempted from inheritance tax will increase to €1,000,000 for heirs belonging to Groups I and II (i.e. children, grandchildren, parents and spouses). This exemption is calculated individually for each heir rather than for the total amount of the inheritance. The current exempted limit is €250,000 per heir and applies to cases to cases where the total existing wealth held by the heirs does not exceed €1,000,000. The current maximum exemption is €402,678.11.

2. Gift Tax

Donations of up to €1,000,000 shall be exempt from taxation if the donation is for the purpose of creating a new company or extending an existing one and where the donator and donee are directly related (i.e. Group I: parents and children).

The donation must fulfill the following conditions:

(i) it has to be formalized in a public deed, and

(ii) the business enterprise must remain running for 5 years from the date of signing of the deed, unless the donator passes away during that period.

However, we note that the Gift tax exemption does not apply to businesses engaged in Movable and Immovable Heritage management.

3. Beneficial changes for disabled people to the Inheritance and Gift Tax:

The maximum exempted amount for inheritance to direct relatives in Groups II and III (i.e. siblings, uncles, nephews) will be increased to €250,000.

When the taxable asset gifted comprises property in the form of the donee’s main place of residence, this asset type will be subject to a 99% exemption from Gift Tax for amounts up to and including €180,000.

To sum up, from January 2018 important changes to the Andaluscian Inheritance and Gift Tax will come into force, principally in relation to the succession between direct relatives.

The previous limit of €250,000 this has been increased to €1,000,000. However, the final, adopted text of the to-be amended law is still to be published by the Regional Government of Andalusia, we recommend that any decision taken by an individual or group should only be based on this anticipated final version.


Tratto da:

Ultima Modifica: 09/12/2017