Inheritance tax for siblings

Does the wonderfully helpful Marcliff or anyone know what inheritance tax my sister would pay in Valencia. I’m a pensioner resident but she’s a UK resident. I’ve tried to find it but it’s just so confusing
Kant many thanks

I am presuming you are asking as the testator i.e person making the will and your sister as the beneficiary. Your sister falls into the Group 3 category with a tax allowance of €7993.

Group III: siblings, aunts, uncles, nieces, nephews, in-laws, and their ascendants/descendants get an allowance of €7,993.



These are the Tax rates on Inheritance up to €7,993: 7.65%
€7,993–€31,956: 7.65 to 10.2%
€31,956–€79,881: 10.2 to 15.3%
€79,881–€239,389: 15.3 to 21.25%
€239,389–€398,778: 25.5%
€398,778–€797,555: 29.75%
€797,555+: 34%

This link has a tax calculator. You would need to calculate the % of your estate that your sister will inherit and feed it into the calculator

https://abadabogados.com/en/inheritance-tax-calculator/

Spain and the UK don't have any tax treaty on Inheritance Tax so she could be liable for UK inheritance tax as well. It is important to get good financial and legal advice before making a will.

Bee

Thanks so much Bee. I already have a Spanish will with her as my sole benificiary. According to the calculation she would have to pay a third of what by property is worth! As you say I’ll have to look into in further. I’d heard somewhere that you didn’t pay tax if your property was worth less than 150000 but that’s obviously not the case
Many thanks for your help

If your sister was a resident of the Comm Valenciana she would get much more favourable tax treatment. I haven't ever heard of the €150,000 valuation of an estate or gift being tax exempt. Maybe between husband and wife who are residents of the Comm Valenciana. That is why it is important to get legal and financial advice to leave your estate in the most tax efficient manner.

Bee

I live in uk , holiday home in Spain , and have made a Spanish Will leaving property to my three sons equally .

So on percentage calculations do my three sons have to pay this amount each ? Or is the tax owed split between three

Forgot to say do they each get the tax allowance or split between three

Inheritance tax is on the estate. The total tax will be applied and paid for in shares by the inheritors.
As they are your sons, they are classed as Grade 2 inheritors and will get a 50 to 75 percent reduction on the tax payable plus an extra discount on that tax up to a total of €15.975 for group 2 which is on the estate, not each individual.
The rate of tax will depend on the value of the estate ranging from 7.65% to 34% but generally work on about 18 to 20%.

Each autonomous region has different allowances and you need to contact a solicitor who knows about the allowances so they can decide on paying the regional taxes or the national taxes whichever is beneficial. They also change the rules quite regularly.

The closer the relationship to the deceased, the less tax to pay.

There is a rule in the Valencia region that estates valued less than 100,000 (may have been increased to 150,000 as that was in 2018) do not pay any inheritance tax but that only applies to Group 1 or spouses.

Also depends on whether the property is the main home, residency status etc etc. Over 65 living in the main home for more than 3 years are not liable to inheritance tax for the surviving spouse.

See a solicitor, many give the initial advice for free.

Perfect . Thank you for giving me a very clear response

Does the surviving spouse pay IT if it’s a second/holiday home? Says you have to live there for 3 yrs permanently to qualify for 0% IT.

Are step children classed as grade 2 inheritors?