Strategies to Minimize Inheritance Tax and Protect Your Inheritance

receive a inheritance it’s not all profit. And it is that, in order to inherit the assets of a deceased person, it is necessary to pay a series of taxes.

One of them is the dreaded Inheritance and Gift Taxwhich taxes the patrimony acquired by natural persons through inheritances, legacies or donations and which has a progressive charactersince instead of a fixed percentage it varies depending on the volume of the inheritance.

The amount to be paid may vary depending on the autonomous communityhe kinshiphe inheritance value and the later use this. Said tax is difficult to avoid, but not impossible, since there are a series of maneuvers to pay as little as possible.

So you can avoid that the tax eats your inheritance

In this context, if you have recently received an inheritance, you should know the three tricks launched by the Organization of Consumers and Users to prevent the Inheritance Tax from eating up part of the inheritance.

1. Spend the inheritance in company

According to the OCU, the simplest strategy to prevent Inheritance Tax from eating up part of your inheritance is spend it in company, that is, with friends or family. «In principle, every gift is a donation, but the Treasury does not usually pursue that kind of liberality, ” aim.

2. Move to a more benevolent autonomous community

The autonomous community It is a decisive factor in the collection of inheritances, since not everyone pays the same for inheriting a home. For this reason, in the case of having significant assets, they recommend evaluating the possibility of moving to a more benevolent autonomous community when it comes to paying Inheritance Tax.

3. Donate with strategy and time

Lastly, except for living in the Canary Islands, they recommend donate with strategy and time to transmit your assets with less tax cost by making donations while you are alive. These are the general lines of the strategy, according to the OCU:

• Think that Your relatives will pay the tax of the community where they reside, unless you give them real estate, which is settled separately, in the community where they are located.
• In addition, you have to donate with time and not on the edgewhy donations made in the 4 years before death are not considered such, but are “accumulated” to the inheritance and pay inheritance tax.
• Also remember that the recipient of a donation can do with it whatever they want; so don’t donate to anyone you don’t trust and remember that, if it is about real estate, always you can donate the bare ownership and reserve the usufruct, to continue using them as long as you live.