[steve c]

Hi

My stepfather passed away earlier this year (JUNE 2015) in Alicante where he had lived for over 30 years. I have been told by his solicitor that I owe approx EUR 13,500 in inheritance tax which I feel is rather excessive and may have been calculated incorrectly. I will outline the sitution as I know it and would be really VERY grateful for any comments about what I have been told.

My stepfather was a full time resident in Spain and had lived there for over 30 years. I am over the age of 21 and was never adopted by him and I do not suffer from any disabilities. In the research I have done this makes me a Class 3 inheritor. He did not own any property as he was in rented accommodation and the only entries in his will were his bank account and shares he held in a Spanish bank. I have inherited 80% of the shares which have a value of approx EUR 53,000 and my daugher inherited the rest. His partner(not wife) inherited the contents of his bank account.

We have all been told that we have to pay inheritance tax of 20%. There has been no mention of any allowances that can be deducted. I have done some research and found that because he lived in the Alicante area I can have EUR 7,993.46 deducted as an allowance meaning that I only pay tax on approx EUR 45,000 and that a sliding scale of percentages is applied rather than a flat rate of 20%.

Please can someone confirm if my understanding of the rules are correct and what my inheritance tax bill should really be. I am very conscious that our 6 month time limit is quickly approaching, hence my plea for help.

Regards

Steve c

 

[John Collier Solicitor in Spain]

Hello Steve

You are right in saying you are a Class III inheritor and will, therefore, pay ISDS at the highest rate on your inheritance and, unfortunately, it could well be as much as the solicitor acting in your stepfather’s estate has calculated. I would suggest you request a written breakdown of the tax calculation from the solicitor and ask him about the allowance you have found in your research if it has not been applied.

It is possible to apply for an extension of the six month period which will usually be granted. Interest is still payable on the outstanding tax but you do not get surcharged.

Best wishes

John Collier

[steve c]

Hi John

Many thanks for your reply. I can confirm that we have already asked for a breakdown of how the calculations have been done and not had any response. The same goes for our request for an extension to be applied for….getting rather worried now that our deadline is looming ever closer.

Sorry to have to pester you but can you confirm if the solicitor is right to say that a flat rate of 20% is correct as every document I’ve read seems to say that the sliding scale is the one that should be used.

Many thanks

Steve

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