# Sale of Spanish property by residents: Absolute relief



## Lonely (Aug 11, 2012)

> *Absolute relief *
> 
> This is available for resident taxpayers over 65, who have lived in property for at least 3 years


Does anyone know if "Absolute relief" means ZERO taxes?

Thanks


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## xabiaxica (Jun 23, 2009)

Lonely said:


> Does anyone know if "Absolute relief" means ZERO taxes?
> 
> Thanks


it would probably help if you told us where the quote came from - it's hard to know when it's not in context


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## Lonely (Aug 11, 2012)

xabiachica said:


> it would probably help if you told us where the quote came from - it's hard to know when it's not in context


from the link that I found here:

http://www.expatforum.com/expats/sp...iving-spain/145387-tax-spain.html#post1080605

then I went here:

Notes on property related tax in Spain 2013. Capital gains tax Spain. Spanish capital gains tax.


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## gus-lopez (Jan 4, 2010)

Over 65 there is no Capital Gains Tax payable, nor is there any retention.
You still have to pay the other bits & pieces ,plus-valia , etc.


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## Lonely (Aug 11, 2012)

gus-lopez said:


> Over 65 there is no Capital Gains Tax payable, nor is there any retention.
> You still have to pay the other bits & pieces ,plus-valia , etc.


Cool!

Now...how do you avoid paying inheritances tax?

I heard something about setting up a foreign company or a trust?

But then, if we do that way...can an over 65 years old person find a way to use the absolute relief or not?

What I mean is: is there a way to combine both things?

Thanks!


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## Stravinsky (Aug 12, 2007)

Lonely said:


> Cool!
> 
> Now...how do you avoid paying inheritances tax?
> 
> ...


There are those that will invite you to set up a Ltd Company, yes. Last I looked at it they wanted about £6k to set it up, where the company owns your property so when you die there should be no IHT. However, the property is owned by a Company and I guess that has ramifications.
As I said elsewhere, if I were to die tomorrow my wife would pay very little IHT, indeed if any. Thats because we live in the Valencia Province, but I believe it is similar elsewhere also


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## snikpoh (Nov 19, 2007)

Setting up a UK company to hold property is all well and good, but it comes at a cost.


Firstly, it will cost to set it up.
You then have to submit to companies house on a regular basis
You have to employ an accountant to do the annual returns
When one of the shareholders dies, their shares have to be passed to someone else. This costs! If you are Spanish resident, then there is a tax on this share transfer.

Whilst one might save a little money, it really depends where you are living as certain areas of Spain already give substantial allowances when transferring assets between resident family members.


You are best to take legal advice and NOT from an accountant trying to get you to set up a limited company. Go some where that is truly independant. Only in that way will you get unbiased advice.


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## Lonely (Aug 11, 2012)

snikpoh said:


> Setting up a UK company to hold property is all well and good, but it comes at a cost.
> 
> 
> Firstly, it will cost to set it up.
> ...


Right, well since I am still in the opposite side of the world all I can do for now is collecting some information.

For instance, this story is alarming:

Una herencia 'envenenada'

Now, it says that lately inheritance tax has decreased but I wonder if that applies to non resident family members.

Thank you


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## Lonely (Aug 11, 2012)

Some info from 2008:




> A guide to Spanish inheritance tax
> 
> If you own a property in Spain, it is best to acquire some basic knowledge on Spanish inheritance tax to avoid future confusion.
> 
> ...


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## Lonely (Aug 11, 2012)

> Many British families that have inherited property in Spain have become victim to overpaid Spanish Inheritance Tax (IHT). According to Spanish Legal Reclaims, a tax loophole meant that up to 40,000 nonresdients were overcharged almost 100% inheritance tax for property or assets inherited in Spain. The total amount to be reclaimed by hundreds of Britsh families is over 400 million pounds.
> The Spanish governemnt IHT policies for nonresidents infringe on the European Unions policies as the IHT for Spanish residents is miniscule in comparison. Luckily, the European Comission has ruled that these provisions are in direct conflict of the EU treaty freedoms. Even though this transgression has been acknowledged, it may take up to 2 years for the policies to be removed and the money be returned.
> Luis Cuervo chief executive at Spanish Legal Reclaims has stated that, “anyone who has inherited a Spanish property and who is not a Spanish resident will have been a victim of discriminatory IHT, which has seen non residents pay higher IHT bills. We believe this tax discrimination has affected up to 60,000 UK families alone, as well as thousands of people in other European countries. They may have believed they were fortunate to inherit a property in Spain, but in the process they have actually been scammed out of a lot of money which they have every right to reclaim.”


...


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## xabiaxica (Jun 23, 2009)

Lonely said:


> Some info from 2008:


haven't read it - but anything more than maybe 6 moths old is likely to wrong

a lot of the rules about everything have changed since about last August


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