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Fuerteventura
12-08-2010, 02:19 PM
We purchased our property at the height of the property boom. We now believe the current market value is much less, maybe up to 50%. My question is this, what value is used for calculating IHT - is it current market value or as written on the deeds? Is there anything we can do to reduce the liability?

lawbird
12-29-2010, 05:30 PM
Dear Sir,

The reference to be used in calculating the value of the property is the cadastral value appearing in your last IBI tax bill (ie. Council Tax).

In Spain, IHT is not paid by the estate as it is in the UK. Each heir will pay their own percentage of IHT applicable on the share that they received during the inheritance proceeding. In terms of reducing the tax liability you would be well advised to speak to a solicitor specialized in family and estate planning. I can put you in contact with one, should you be interested.

In general terms, large IHT tax reductions apply to children and spouses who receive the deceased's main residence. This is therefore an important factor to consider at the time of drafting your will. However, it is important to analyze the particular facts of your case in order to devise a more tailored strategy on estate planning.

If you would like to discuss this matter further, please do not hesitate to contact me at info @ lawbird.com

Kind regards,