From 1 January 2018, inheritance tax will be reduced in Murcia and Andalusia. There are also changes to gift tax. In certain situations, it is now possible to inherit or donate without paying taxes in Spain.
Inheritance and gift tax in Murcia
Descendants over 21 years old and the surviving spouse can already enjoy a reduction of 60% on the tax rate since 2017. From 2018, a bonus will be added. The taxable basis for children, parents and the surviving spouse will be reduced by 99%. As a result, your heirs will pay virtually no inheritance or gift tax.
Inheritance tax and gift tax in Andalusia
Inheritances in Andalusia below €1,000,000 will no longer be taxed from 2018. No inheritance tax will be due in that case. This rule applies to children, grandchildren, parents and the heir's surviving spouse. However, a tax return still needs to be filed.
In the case of a donation, the situation is different. Thus, the taxable minimum is also there for gifts. However, it only applies to the gift of a business or in case the donee will use the gift to start a business.
What does this mean for me?
As a resident of Belgium, you will still owe inheritance tax in Belgium. The reduced inheritance tax in Spain also has an impact on the calculation of Belgian inheritance tax. Indeed, inheritance tax in Belgium is calculated on the basis of your worldwide assets. The larger your assets, the higher the progressive rate.
By gifting Spanish assets, your heirs can save taxes in Belgium. Gifting can then be a good way to arrange the transfer of assets.