Gift tax from a parent in the UK?
Inheritance tax is constantly a hot topic in the UK and living abroad also, but for many people it’s not always clear as to what the rules are. In Spain for example, it’s regional on what you might pay for inheritance tax/gift tax and depends on many variables, including the amount to be received, the relationship to the donor and your country of residence.
Many people are accruing more and more assets from parents when they pass on from this life, and these assets are accruing more and more in value. However, inheritance tax is not changing that much, meaning in real terms people are paying or will be paying more money in tax. Therefore, many are choosing to try to pass their wealth on as gifts before this tax continues to escalate and plan to mitigate as much as possible.
However, for those in Catalonia inheriting/receiving a gift from a parent the tax is nowhere near as much as people might think. What is important is that you declare it, and do it on time so as not to receive any penalties.
As I stated earlier, it’s very difficult to give exact numbers as everyone’s situation is different. However, if I use a regular scenario I come across it will give you a very rough idea of what you might pay:
Potential Inheritance Tax
A British person, living in Catalonia, inheriting from a parent an amount of £250,000 would pay approximately €4,000 in tax.
Potential Gift Tax
A British person, living in Catalonia, being gifted from a parent an amount of £250,000 would pay approximately €16,500 in tax. (Note this gift amount is based on the receiver owning up to €500,000 in assets prior to the gift being received and reporting this gift to the notary.
As I say, these are approximate figures, but it will give you an idea of what you might pay.
We help clients declare this correctly and also plan what is the best thing to do with their money, including buying property, paying off mortgages, increasing its intrinsic value or protecting it against inflation.