Suma - Capital Gains Tax

wes1977 · by **wes1977** » Wed Nov 30, 2022 3:37 pm

My father passed away in Spain in October 2017 and we inherited his property out there. At the time we went through a Spanish Solicitor to sort everything and we paid all taxes due at the time.
In August 2019 we received a bill from SUMA relating to Capital Gains Tax requesting us to pay. I spoke to the solicitor out there to ask their advice and they told me that at the time of my dads death this tax was suspended but now they have brought it back and they have backdated it to everyone who died from Oct 2017 onwards and I will have to pay it.

I have not paid it as I do not have the money to pay and I think it is unfair that we should be made to pay this when it has been presented to us 2 years down the line. It is now 5 years since my dads passing and I am still being chased.

I cannot sell or even access the property out there as my dads partner still lives in it until such time she does not want to which was my dads wish in his will.

Where do I stand with this and what will happen if I do not pay. Could my credit be affected in the UK?

Is there anyone else on here that has experienced this?
I have to say the whole process in Spain when someone dies is horrendous.

earlybay · by **earlybay** » Thu Dec 01, 2022 9:41 am

Unfortunately, as far as I am aware the owner of the property is responsible to pay the Suma. If not paid the property will accumulate a debt of the outstanding payments.

Paulr · by **Paulr** » Mon Dec 12, 2022 8:57 pm

Hi Wes,

This doesn't make sense. When you and your sister inherited your father's property, you would have paid Inheritance Tax, also known as Succession Tax, but you wouldn't pay Capital Gains Tax unless you sell the property (assuming that it isn't your primary residence at the time you sell). As children of the deceased, there were very generous allowances, especially in the Comunidad Valenciana autonomous region, against Inheritance Tax which would probably have resulted in your Inheritance Tax liability being quite small, relative to the value of your Dad's property, possibly discounted by as much as 95%. Also, as you inherited the property 5 years ago and haven't sold it, this would actually attract a further allowance against Inheritance Tax, which you should ask your lawyer about.

The other thing to remember is that SUMA is the agency which collects municipal taxes in the Alicante region, so the bill they've sent you must be for a tax levied by your Town Hall, not for national taxes. I think your bill is actually for "plusvalía", a municipal tax in respect of the increase in the value of the land on which your inherited property is built - it's based on the difference in value between when your father bought the property and the date on which ownership passed from him to you (and your sister). This would also align with your lawyer's advice that, in 2019, the tax had been suspended. At the time, it was misreported as having been abolished, but that wasn't the case, it was suspended by the High Court to enable Spain's Finance Ministry to come up with a calculation that more accurately reflected any change in land values - this article explains it in more detail:

https://www.mediterraneanhomes.eu/en/bl ... -abolished

In your position, I would specifically ask your lawyer whether the bill is for Plusvalia tax. If it is, then you need to pay it - I'm not aware that this will affect your UK credit rating, but delaying payment any further will simply result in the bill increasing because of fines for late payment and interest.

Good luck!

Suma - Capital Gains Tax