18 Feb, 2016 @ 10:14
1 min read

I don’t bequeath it!

Antonio Flores
Antonio Flores
Antonio Flores

ACCORDING to the Spanish right-wing PP party, they do.

But the socialist-run Revenue and Public Administration Council says not, quoting records for 2015 that show no more than 81 Andalucian families moved ‘abroad’ within Spain, and only 17 to Madrid.

If we consider that the above data is offered by bitterly opposed political parties, the truth must lie somewhere in between.

Yet there is no denying that inheritance tax (IHT) in Andalucia is seriously onerous compared to other regions in Spain, such as Madrid.

For example, a 40-year old registered in Andalucia (or any EU-EEA resident inheriting in this region) will pay the Tax Office €28,250 on a €200,000 inheritance whereas a Madrid-based inheritor will only have to part with €285.

In addition, defective law drafting means that a person receiving estate under the €175,000 allowance (97% of cases in 2015) from his/her parents will be exempt from IHT but if that same person receives a further €25,000 (as per the first case), he/she will be slapped with a €28,000 tax bill!

This ‘tax bracket creep’ is one of the great challenges for 2016 faced by Maria Jesus Montero, Revenue Counsellor of the Junta. Conservatives, led by the PP, are all for eliminating IHT altogether between parents and children, irrespective of the size of the estate, on the remaining 3% tax returns.

Dealing with that relatively small 3% gap would solve many problems: the proliferation of illegal tax evasion schemes using foreign companies or equity release mortgages, uncertain avoidance loopholes or outright rejection of inheritances, such as when the taxes to be paid are higher than the equity on those properties.

Antonio Flores (Columnist)

Lawyer Antonio Flores is the legal columnist for the Olive Press. Antonio has been practising law since 1997, year in which he began working for a large law firm in Marbella as a Property Lawyer. In 1998 he left the company he had joined a few months earlier, and used his knowledge and the experience gained to build his own practice. He is known throughout the community as independent, reputable and trustworthy. Through a combination of strong work ethics, determination and international exposure, his competence of Spanish Law is unparalleled and demonstrated through his fluency in English and Spanish.

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