Lay(Law) 6/2008 provides that the deductions to the value of the asset to be inherited that may be made by the spouse, children (including adopted children) or parents of the deceased when the asset to be inherited is the family home are as follows:
Value of Property Deduction (%)
Up to a value of "'90,000 - 99%
From "'90,000 - "'120,000 - 98%
From "'120,000 - "'180,000 - 97%
From "'180,000 - "'240,000 - 96%
Over "'240,000 - 95%
Where included in the value of the estate is a family or private business, the value of the business for the purposes of inheritance tax may be reduced by 4% if the following criteria are met:
a) Article 4(8) of the Ley(Law) 19/1991, del Impuesto sobre el Patrimonio applies i.e. the business was carried out regularly by the deceased and was the principal source of their income
b) The business activity was carried out in the Principality of Asturias
c) The beneficiaries who inherit the business are family members (to third degree)
d) The beneficiary must retain the business for a period of 10 years and may not carry out any operation that results in the substantial reduction in their ownership of the business.
e) The registered fiscal and business address of the business must be maintained in Asturias for a period of not less than 10 years following the death of the testator
f) The value of the business or shares in the company may not exceed "'5,000,000
** This deduction is compatible with and may be applied in addition to the deductions already available under Art 20.2(c) Ley 29/1987 which provides for a deduction of 95% in the value of a family or private business inherited by the family of the deceased.**
Where the beneficiary is unable to comply with the requirement for maintaining the business in Asturias then they must inform the relevant office within 30 days of the move and pay that part of the tax which they were not obliged to pay as a result of this deduction.
All of the above deductions are equally applicable to the following groups of people:
1) Registered unmarried couples as per Ley del Principio de Asturias 4/2002 are treated as would married couples
2) Persons who are fostered are treated as if adopted
3) Persons who foster others are treated as related for these purposes.
To obtain a free and exclusive guide on this topic (the only one available in English on the web) go to:
Loopholes in Spanish Inheritance Tax
