# Inheritance Tax between Married Couples



## Factseeker (May 16, 2012)

Hi,

Considering maybe buying a property in the Vieja Baja region.

Has anyone any information ref IHT between married couples.

Have heard of problem cases - on the other hand from reading I understand that the Comunidad Valenciana gives a 99% relief on any demands.

So that although on paper it could be onerous - in reality it is pretty much insignificant.

I am talking of a situation where Wills as necessary are drawn up correctly and both husband and wife are Spanish 'resident'.

Hope to hear.

Rgds.
FS


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## Solwriter (Jan 10, 2012)

I will leave this for someone from Valencia to answer your question as the amount of IHT paid is in some ways area specific.
There are also ways to get around this, as I'm sure you have already read, but I'll let someone else explain those. 

But what I will say is, as this all relates to the _Cadastral Value_ of the property, when purchasing a property, you need to take this value into account, rather than the figure you are paying for the property.
I say this because, although property market values are falling, the price you pay may bear little resemblance to the Cadastral Value and, hence, the amount of IHT which would be applied according to regional criteria.


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## snikpoh (Nov 19, 2007)

Factseeker said:


> Hi,
> 
> Considering maybe buying a property in the Vieja Baja region.
> 
> ...



Basically, I think you are correct. I'm sure the exact figures have been discussed before. One issue though, Spain has a law which is important to understand if children are involved.

This is a good link SST


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## snikpoh (Nov 19, 2007)

From the another forum - 

Unlike the UK there is no automatic relief for inheritances by spouses. That means that if you and your wife are joint owners, when one dies the other will inherit half of the house and pay tax on the value of that half.

If it was the family home then there is a 95% reduction if the property is retained for 10 years. In addition there are various different rules in certain regions. In Valencia there is a reduction of the tax rate up to 99 % for the descendants, ascendants, and the living spouse who were Spanish residents in the Valencia region at the time of the death.


Be sure that you are BOTH fiscal (tax) residents - that is, you are both submitting tax returns even if they are nil returns.


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## gill556 (Dec 23, 2010)

I believe to get full allowances you have to be both over the age og 65 years and it has to have been the main home for 3 years. This is providing you are fiscal (tax) resident. Even if your income is below the threshold you still need to file a nil tax return each year. If either of you have children not to each other then beware because it is a whole new ball game. My husband doesn't have any children, however he has been stepfather to my children for the last 43 years since they were ages 5 and 7. However that counts for nothing. If I die first and my estate goes to my husband then my children will inherit from him but will have no tax allowances whatsoever, they will be treated exactly the same as if it was left to a neighbour.


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## snikpoh (Nov 19, 2007)

gill556 said:


> I believe to get full allowances you have to be both over the age og 65 years and it has to have been the main home for 3 years. This is providing you are fiscal (tax) resident. Even if your income is below the threshold you still need to file a nil tax return each year. If either of you have children not to each other then beware because it is a whole new ball game. My husband doesn't have any children, however he has been stepfather to my children for the last 43 years since they were ages 5 and 7. However that counts for nothing. If I die first and my estate goes to my husband then my children will inherit from him but will have no tax allowances whatsoever, they will be treated exactly the same as if it was left to a neighbour.



Can you clarify, please, what you mean by "to get full allowances you have to be both over the age og 65 years".

Thanks


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## Lucie123 (Dec 7, 2011)

What would be the situation if the house was in the adult childs name (lives and pays taxes in spain) and their parents lived in it as residents and the adult child died first


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## Stravinsky (Aug 12, 2007)

Factseeker said:


> Hi,
> 
> Considering maybe buying a property in the Vieja Baja region.
> 
> ...


Yes .... you are right
(From someone who has seen it in action and lives in the Valencia region)


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## Wannabe Expat (May 2, 2012)

snikpoh said:


> Can you clarify, please, what you mean by "to get full allowances you have to be both over the age og 65 years".
> 
> Thanks


Are you not confusing the rules on Capital Gains Tax with Inheritance Tax?


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## baldilocks (Mar 7, 2010)

snikpoh said:


> From the another forum -
> 
> *Unlike the UK there is no automatic relief for inheritances by spouses. That means that if you and your wife are joint owners, when one dies the other will inherit half of the house and pay tax on the value of that half.
> 
> ...


These rules seem to vary depending on where one lives. In Andalucia, there is a very generous allowance between spouses so that they almost always pay little or no tax.


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## Factseeker (May 16, 2012)

Stravinsky said:


> Yes .... you are right
> (From someone who has seen it in action and lives in the Valencia region)



Hi Stravinsky,

In fact a Hello to all and my thnxs for your replies - all help in confidence building.

Worry always is when looking for revenue - rules get changed - but no way to budget for that sort of thing.

Difficult decision to be made - my wife is french and as they say - you can take the girl out of France but not France out of the girl ;o)) - so she would prefer France.

But I have been waiting for the crash for some time and now there are real property bargains about.

Only problem is I now hear all manner of things ref living in Spain - in particular ref the activities of 'undesirables' - so difficult.

I lived in Spain many many years ago for a 2 year period and we loved it - but since then so many places in the world seem to have changed.

Trying to do my researches before a decision and ask the people who 'know'.

Best Rgds.
FS.


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## baldilocks (Mar 7, 2010)

Factseeker said:


> Trying to do my researches before a decision and ask the people who 'know'.


You are on the right course - research, research, research.

So many turn up here with only the minimum of information and wonder why things don't work out as they thought (n.b. I refrained from using the work "planned" because, invariably, they didn't plan, just hoped that Spain and life here would fit in with their aspirations) 

Most of us who are happy and settled here did all our researches thoroughly because trial and error in this type of situation is just too costly.


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