Expenses and taxes in an inheritance
Table of Contents (10)
- Differentiate notarial expenses and taxes in an inheritance
- Notarial, registration, and management expenses in the processing of inheritances
- Notary fees inheritance
- Inheritance registration fees
- Inheritance lawyer fees
- Management costs for the settlement of inheritance tax and the registration of the inheritance in the registers
- Taxes on an inheritance
- Inheritance tax in the registers
- Municipal capital gains tax
- Income Tax (IRPF)
At JLA Notarios we are specialists in the processing of inheritances in Barcelona. With this post we want to answer some of the most common questions our clients ask us: What are the taxes on an inheritance and the notarial fees?
In previous articles, we have talked about the need to go to a notary to process an inheritance (you can read it here):
Differentiate notarial expenses and taxes in an inheritance
Now we will analyse the cost of inheriting, separating the taxes on an inheritance from the notarial fees.
The processing of an inheritance at a notary with or without a will involves several expenses. Thus, in relation to the costs of inheritance, we can differentiate: Notary fees, Registry fees, management fees, lawyer assistance fees in inheritance, and tax costs.
The cost of taxes on an inheritance can be the highest and it is essential to assess it properly to avoid paying more than necessary.
Notarial, registration, and management expenses in the processing of inheritances
We can distinguish the following expenses in inheritances:
Notary fees inheritance
Notary fees in an inheritance are set by law and take into account numerous criteria such as the number of heirs, the number of properties inherited, the value of the inheritance, or any additional procedures that need to be carried out, such as processing a declaration of heirs prior to the inheritance.
Therefore, the cost of notary services in an inheritance must be calculated on a case-by-case basis. At JLA Notarios we can send you a no-obligation quote by email, with attendance at the signing at our notary office in Barcelona being the only requirement.
Inheritance registration fees
If there are properties, they must be registered in the Land Registry, so there will be an additional registration cost for each property inherited.
The cost of the Registry must also be calculated on a case-by-case basis, as it depends on factors such as the value of the properties or the number of heirs.
Inheritance lawyer fees
If a lawyer is hired to assist the heirs in the inheritance process, their fees must be paid.
The assistance of a lawyer is advisable in some cases, such as when the inheritance is of a very large amount. However, the assistance of a lawyer is not always necessary in an inheritance, as the inheritance is signed exclusively by the heirs. If the notary does not settle the inheritance taxes, the assistance of a lawyer is indeed advisable.
Management costs for the settlement of inheritance tax and the registration of the inheritance in the registers
Whenever there is an inheritance, the inheritance tax must be declared to the Tax Office. If this process is carried out by a professional, their fees will have to be paid. It is usual to hire the services of a trusted lawyer or notary to perform these functions. The cost usually depends on the number of heirs and the amount of the inheritance, so it will have to be calculated on a case-by-case basis.
Taxes on an inheritance
Now, we are going to distinguish the costs of Taxes in an inheritance.
Several taxes can arise in inheritances, and each must be paid within the deadline set by the Tax Agency. Basically, the taxes that must be paid in an inheritance are the three described below.
Inheritance tax in the registers
This tax must be paid within six months following the death of the person who leaves the inheritance and a form must be completed at the Tax Office for each beneficiary in the inheritance.
It is very important to calculate the Inheritance Tax correctly as there are many factors to consider such as the closeness of the relationship between the deceased and the heirs, the assets inherited, whether there is a main residence, and many other aspects.
Furthermore, it is necessary to apply numerous tax allowances and deductions. Therefore, the cost for each person who inherits must be determined on a case-by-case basis.
At JLA Notarios we can take care of the management of this tax, and we have two articles available on the blog that analyse the inheritance tax in more detail:
Municipal capital gains tax
If a property is inherited, a tax must be paid to the Town Hall where the property is located. It is paid if there has been an increase in the value of the property from when the person leaving the inheritance acquired it until the time of their death, and it also has special rules.
It must be declared and paid within six months following the death and involves filling out a tax form. At JLA Notarios we can take care of the processing of this tax if the Town Hall has enabled the electronic connection, which is most common in inheritances in Catalonia.
Income Tax (IRPF)
Regarding the IRPF, two tax returns must be distinguished: that of the deceased and that of their heirs:
- Income of the deceased in an inheritance: the heirs must declare and pay on behalf of the deceased the IRPF that would have corresponded to them in the fiscal year in which they died. The general rules of the income tax are followed.
- Income of the heirs: the heirs must consider what is received in an inheritance in their annual income tax return without paying for the assets received, in what is known as the deceased's capital gain. However, they must pay IRPF on the income that the inheritance produces in favour of the heirs from the death of the deceased, for example, in the case of receiving rent from any of the inherited properties.
In short, these would be the tax costs in an inheritance. Due to the complexity of the matter, if you need to make any enquiries, we can assist you without obligation. You can contact us via our email bcn@jlanotarios.com or through the contact form on our website.
At JLA Notarios we provide Succession Law Services and we specialise in the processing of inheritances in Barcelona and other locations. We can process yours as long as you come to sign at our notary office in Barcelona. We will be delighted to assist you.
