There is a 2014 update to this post here. Several years ago Spain’s central government devolved tax-rate setting powers in the area of inheritance and gift tax to the regional governments. Accordingly it has been for the local governments to determine what if any tax must be paid upon receiving an inheritance or gift. In many cases the local governments have decided to effectively eliminate the tax by applying deductions with the proviso that the beneficiary must have lived in the region for a specified number of years.
Each region has dealt with the subject of inheritance taxes slightly differently and in order to understand the impact of the taxes in the Alicante area it is necessary to look at the measures enacted by the local government in Valencia which has jurisdiction over Alicante. The main measures can be summarised as possible:
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