Lawyer Raymundo Larrain briefly explains the (groundbreaking) changes in inheritance tax in the region of Valencia.
In a bold move, the newly appointed regional government of Valencia has approved today Friday 21st of July to suppress inheritance tax from parents to children (Groups I & II) with retroactive effects as from the 28th of May 2023. This still needs to be ratified by the Valencian regional parliament as a mere formality to be enacted (likely within the next 30 days).
In Spain, beneficiaries are classified in four different groups depending on their kinship with the deceased. As a general rule, the closer the kinship, the more lenient the tax allowance.
Group I: Natural and adopted children under 21.
Group II: Natural and adopted children over 21, spouse, registered civil partnerships, parents, adoptive parents, grandparents, and great-grandparents.
Group III: Relatives in second and third degree: in-laws, brothers/sisters (siblings), nephews/nieces, aunts and uncles.
Group IV: Relatives in fourth degree, or without any relationship: a friend, common law partners.
You can expect these tax breaks to be expanded, and improved upon, over the next years in the Valencia to include Group III, in line with what’s already been approved in other regions of Spain with similar tax-friendly laws.
This trend follows on the back of other Spanish regions which have also suppressed IHT over the years to much success, such as:
- Andalusia
- Balearic Islands*
- Madrid
- Cantabria
- Castilla y Leon
- Extremadura
- Murcia
*to be approved shortly
That’s great news, but I’m a British national (or from outside the EU), this tax change surely doesn’t benefit me
Actually, it does!
Although Brexit is undoubtedly an unmitigated disaster, the good part is that our nice EU Overlords have ruled that ALL non-EUs must also benefit from regional tax allowances (such as this new one in Valencia) in line with the core tenements that behove the Union.
Bottom line, if you are British, this tax change favours you. Same goes for our American cousins, Canadians, South Africans, Australians, New Zealanders, etc basically anyone who wasn’t lucky enough to be born in the light of the Union; nobody is perfect. 😊
And for those brave souls that wish to delve deeper on this arid tax topic: Inheritance tax in Spain: regional tax reliefs to benefit ALL non-residents in the future (even outwith EU/EEA) – 29th July 2019
LNA offers the following related tax & legal services:
- Will-writing service
- Probate & Succession (inheritance tax)
- Death Certificate
- Spanish Inheritance Tax Assessment Report (SITAR)
Further reading:
- Spanish Wills and Probate Law in Light of European Regulation 650/2012 – 8th January 2015
- Changes to Spain’s Inheritance and Gift Tax Law – 21st February 2015
- Dispelling Spanish Inheritance Tax Myths – 8th August 2015
- Spanish Inheritance Tax for Non-Residents (Part I) – 21st February 2016
- Spanish Inheritance Tax for Non-Residents (Part II) – 8th March 2016
- Brexit and Inheritance & Gift tax in Andalusia – 8th August 2019
- Inheritance tax in Spain: regional tax reliefs to benefit ALL non-residents in the future (even outwith EU/EEA) – 29th July 2019
- Dealing with someone’s affairs in Spain when they die – 2nd March 2023
Marbella-based Larraín Nesbitt Abogados (LNA) has over 20 years’ taxation & conveyancing experience at your service. We offer a wide range of 50 legal and corporate services. Our team of native English-speaking lawyers and economists have a long track record successfully assisting expats all over Spain.
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Alexander III of Macedon (21st of July 356 BC – 11th of June 323 BC).
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