Our tax department has specific knowledge of this Inheritance and Gift Tax, as well as the different procedures that may arise in the management and settlement of this tax.
Inheritance and Gift Tax is a tax that is applied throughout Spain, with some peculiarities in the foral (regional) regimes of the Agreement with the Basque Country and the Agreement with Navarre. In addition, it is a tax ceded to the Autonomous Communities, which have regulatory powers over certain aspects of the tax, such as the following: (i) reductions in the tax base, both in mortis causa acquisitions and in donations; (ii) the tax rate; (iii) the setting of the amount of pre-existing assets and the multiplier coefficients; (iv) deductions and allowances; and (v) regulation of the management and settlement of the tax.
This tax has a natural cross-over with Personal Income Tax, as one or the other may be applied depending on the onerous or lucrative nature of the transfer. Therefore, if the acquisition is for valuable consideration, it is subject to Personal Income Tax, while if the transaction is for profit, it is subject to Inheritance and Gift Tax. Ergo, the acquisition of wealth by inheritance is not subject to Personal Income Tax.
Our in-depth knowledge of this tax enables us to offer advice in another area in which we also specialise in inheritance planning. Proper inheritance tax planning can save taxpayers a considerable amount of tax, which can amount to a very significant sum of money on many occasions. When the person who wishes to plan their succession has items in their estate that are eligible for tax relief, it is very important to obtain the right advice to ensure that the requirements for applying for the tax benefits in question are met. Otherwise, the opportunity to optimise the taxpayer’s tax bill will be lost, and tax efficiency will not be maximised. Our tax department specialises in advising on this type of task, and we can help you with the advice and management of this tax.