Who Gets The Property?

[Unicorn]

Given the IHT laws here, I would imagine that quite a few properties 'go to the state'.

But who exactly gets it? How does it work, if the inheritor cannot pay the taxes?

Does anyone know of an instance when this has happened?

Experiences welcome!

[katy]

Between 2007 and 20012 the number of people declining inheritances grew 110%

[Unicorn]

That is interesting, Katy, and given the stringent tax regime, crisis and changes in catestral values I can see why it happened. What I am interested in is how the process works, how are properties are identified once the owner is deceased and the tax not paid, and who actually gets them? Are they auctioned off, by whom and who gets the money?

It is interesting that in England and Wales (not sure about Scotland and NI) people complain about the IHT threshold of over £300,000, a level of which the Spaniards would be truly grateful.

[katy]

The UK allowance isn't so generous as houses are more expensive than Spain particularly in the South East.

I don't agree with inheritance tax in any country. Whatever assets people have acquired they will have already paid tax on their earnings to buy their house. Canny people will have it minimised but many haven't thought it out. A business in our village is up for sale because the Father hadn't made provision for the tax and his Son will be out of work.

[El Cid]

It is interesting that in England and Wales (not sure about Scotland and NI) people complain about the IHT threshold of over £300,000, a level of which the Spaniards would be truly grateful.

But let's not forget that the Spanish IHT rate (for close relatives) is a maximum of 34% and that rate doesn't kick in until the individual bequest is nearly €800k. The starting rate is only 7.65% and if you did inherit €800k the overall tax on that is 25%.

The UK rate is 40% on everything over the basic allowance.

Sid

[infoseeker]

Katy-the allowance is £. 325 k in the UK.
What you seem to forget is that spouses don't pay IHT on their husband'/ wife's
assets, therefore nothing to pay, as there would be in Spain.
It is terrible that in Spain spouses have to pay IHT on the deceased's assets, with money they have already been taxed on, assets they they built up together over the years
Spain is supposed to be overhauling its IHT laws; if they only do one thing, they should exempt spouses and registered partners from IHT
Sid - starting rate ONLY 7.5 %? .
Anyone paying IHT on half the property, plus assets of eg 100k is in for a hefty bill!

[El Cid]

Sid - starting rate ONLY 7.5 %?

Yes - 7.65% to be exact.

http://spain.angloinfo.com/money/genera ... tance-tax/

Sid

[katy]

Info seeker, sorry I had forgotten about the married couple exemption. Makes it much fairer but I would like to see it abolished under a million for all close family.