THE VALENCIAN parliament passed a law on Wednesday to slash inheritance tax to just 1% for most beneficiaries.

It will apply retrospectively to inheritances and gifts received after 28 May 2023 (the date of this year’s regional elections).

The law means that succession and gift tax has therefore been virtually eliminated for spouses, children, grandchildren and parents in the Valencian Community.

It is a major reduction on the previous 50% rate, which now puts the area on a par with regions like Andalucia and Murcia.

The €100,000 tax-free allowance for beneficiaries also remains in place for most cases.

Rules remain unchanged for siblings, cousins, aunts/uncles, nieces/nephews, in-laws, and stepchildren.

The change is estimated to benefit around 15,000 people in the case of inheritances and a further 5,000 in regard to donations.

Valencian Finance Minister, Ruth Merino, said: “The annual cost could amount to €230 million which would be just 1.1% of the total regional budget.”

The measure was pushed through by the ruling Partido Popular-Vox coalition with the PP’s Miguel Barrachina describing it as an ‘end to fiscal hell’.

Vox deputy Teresa Ramirez said it was a ‘very good measure and Valencians were waiting for it- especially working families.”

The opposition PSOE socialist and Compromis parties voted against it, with the PSOE’s deputy spokesperson, Aracadi España stating that it only ‘helped 0.4% of Valencians’.

The benefit also applies to all EU and non-EU residents in the Valencian Community, which means British nationals living in the region can also take advantage of the tax change.

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