The first major difference between Spanish inheritance tax and elsewhere is that in Spain the tax payable is determined with reference to the heir or beneficiary rather than merely considering the size of the estate itself.
Whereas in the UK inheritance tax is only payable where the threshold (currently £325,000) is exceeded and there is no need to consider any other factor if the estate is valued below this, the same is not true in Spain.
In Spain it is necessary to consider the following factors before the inheritance tax liability might be determined:
- Tax Exemptions
- Tax Rates
- The Wealth of the Beneficiary
- The proximity of the relation of the beneficiary to the deceased
- Funeral Costs
It should be pointed out that, at a state level, no exemption exists for spouses as is the case in other countries.
A couple would often be considered to own half of a property each. Upon the death of one of the spouses the surviving spouse is considered to have inherited the other half (if this is provided for in the will).