Andalucian legislation on inheritance procedures includes an interesting change this year in applying the autonomic reduction for a spouse and direct relatives, with heirs paying no tax if the amount is no more than €250,000. Under the new legislation, which came into force on 1 January 2017, the full reduction is applicable provided they meet the following requirements:
• They are direct relatives of groups I and II: that is descendants and adopted,spouses, ascendants and adopters.
• The value of the inherited assets, for each heir, does not exceed €250,000 (before the law reform, this taxable base could not exceed €175,000).
• Pre-existing wealth does not exceed €402,678.11.
• Beneficiaries of life insurance policies are included.
The amended law also allows for the correction of what was considered a “jump error”. In situations where the assets exceeded €175,000 – for example, €180,000 – the heirs had to settle the tax for the full amount of the inheritance (i.e. €180,000) and not for the excess of €5,000. After the amendments to the law, if the value of the inheritance assets is between €250,000 and €350,000, a reduction of €200,000 would be applied, so that the heirs would only be taxed for the amount exceeding €200,000. For example, if a child inherits from his father an inheritance valued at €295,000, this would be settled for €95,000. For inheritances over €350,000, heirs are required to pay inheritance tax on the full amount: i.e. from €1, with no reduction at all. This amendment to the law also applies to cases of acquisition of assets and rights by inheritance, legacy or any other successor title, if the deceased had been resident in a member state of the European Union, following the Judgment of the Court of Justice of the Union European Union of 3 September 2014 (Case C-127/12). Do not hesitate to contact our law firm in Marbella, to resolve any doubts you have about this matter or any others related to successions.
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