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ANDALUCÍA’S SUCCESSION
PLANNING BENEFITS There are so many benefits to living in Southern Spain, but, as with anywhere, there are both pros and cons. Many people find Spain’s succession regime to be complex and costly, and expatriates need to understand how Spanish succession tax and law works and affects their family. The good news is that over recent years the local Andalucía government has reduced succession tax liabilities for residents, making it one of the most tax attractive regions to live in. WORDS CHRIS MCCANN, SENIOR PARTNER, BLEVINS FRANKS SPANISH SUCCESSION AND GIFT TAX (SSGT) KEY FACTS: Z SSGT applies to both inheritances and lifetime gifts. Z It is charged on each recipient, including spouses. Z It is due when: » the beneficiary is resident in Spain, or » the asset being gifted or inherited is a Spanish asset (Spanish property, bank account, etc.). Beneficiaries are divided into 202 / APRIL 2022 ESSENTIAL MAGAZINE
groups: » Group I – children and other descendants under 21 » Group II – descendants over 21, parents and other ascendants, spouses » Group III – siblings, cousins, aunts/uncles, nieces/nephews, in-laws, stepchildren » Group IV – everyone else, including unmarried partners even if registered as a pareja de hecho unless the region grants them the same rights as
spouses (Andalucía does) Z The tax rates and allowances are determined by the state each year, but the regions can make them more beneficial for local residents. Z UK nationals can be liable to both Spanish and UK inheritance tax since UK inheritance tax is based on domicile not residence, but a credit is given in Spain for tax paid in the UK to avoid double taxation.
