When a person dies, his assets and rights pass into the hands of the heirs who are responsible for paying the tribute known as inheritance tax. Said tax is levied on the patrimonial increase that supposes for the heirs of the deceased to receive their assets and rights, either by will or by law.
This tax may vary depending on the autonomous community in which the successor is located and the assets that he receives. In some cases, there are bonuses or exemptions for direct family members and different tax rates are established depending on the degree of kinship or the value of the assets received.
This form of tax is subject to both aspects related to tax law and those derived from civil laws related to the family, specifically with regard to inheritance law.
A large number of countries establish the inheritance tax. This tax obligation is particularly relevant in European countries such as France, Germany, Spain, Belgium and Denmark, as well as in Latin American countries such as Argentina and Chile and the United States.
Who, when and where the Inheritance Tax is paid
The inheritance tax is the one that taxes all the assets, rights and obligations that are transmitted after the death of a person. This transmission of inheritance passes to the successors, both heirs and legatees. Before receiving that inheritance they are obliged to pay this tax.
The first procedure is the preparation of self-assessments of Inheritance Tax. It is very important to know that December 31, 2020 was the date on which the self-assessment regime was established as the only system for presenting Inheritance Tax. It must be carried out exclusively by the taxpayer or taxpayers, or where appropriate by an ascendant, descendant and/or spouse.
Who is required to declare? The heirs and legatees are those who are obliged to declare the Inheritance Tax for the inheritance or legacy that they will receive after the death of the testator.
One of the most unknown particularities is that the people who are beneficiaries of life insurance contracts in the event of the death of the insured, will also be obliged to declare.
This occurs when the person who contracted the insurance is a person other than the beneficiary.
In order to carry out the management correctly, the complete mandatory documentation must be included. That is to say, all the copies of the self-assessment with a copy of the income if the outstanding fee has been paid, the first copy of the Inheritance Acceptance Deed and a simple copy. If it is a private or judicial document, both the original and a photocopy must be included. If said deed does not exist, the Inventory of Assets and Heirs can be presented in duplicate.
In this document will be the data of the deceased and heirs such as the address, the list of assets and their value or debts in the event that they exist. Also, a copy of the Death Certificate, a copy of the last wills, the Testaments and identification documents of the heirs must be included.
When housing is included in the inheritance, the corresponding documentation with the IBI data must be included and if there are bank accounts, a certificate must be requested from the bank in which the capital appears, and if there were any type of investments. The same for the case that there are vehicles, shares in the stock market or insurance contracts. In all cases, you must prove that they exist officially.
Where can you pay? The processing of the self-assessments will be carried out individually. In the event that several self-assessments must be made in the same return, you can select the payment method to proceed to pay them, defer them or split them.
The heirs must submit the tax return electronically at the virtual tax offices or in person.
Another exception to take into account is that legal persons acting as taxpayers are obliged to electronically submit and pay self-assessments.
The forms of payment are covered both by payment by transfer, by card, checking account or in person at affiliated banks.
When should it be paid? The filing period ends six months after the death of the person leaving the inheritance. The heirs can request an extension of six additional months to present the documentation requested by the Tax Agency.
How to calculate the Inheritance Tax.- To proceed with the calculation and determine the fee to be paid in the Inheritance Tax, it is a progressive tax, in which there is no fixed percentage of tax, but rather
the more the taxpayer or taxpayer inherits, or in other words: the higher the taxable base, the more he must pay, that is, the higher the tax rate obtained with which he will have to pay the tax.
The general tax ranges from 7.65% to 34%, after which the bonuses of each Autonomous Community that may correspond are applied.
To calculate the inheritance tax it is necessary to follow the following steps:
- Determine the net estate, which is calculated by adding the actual value of the assets at the time of acquisition (gross estate) and subtracting deductible debts and charges.
- This result will constitute the tax base of the Inheritance Tax.
- Apply the corresponding reductions and bonuses, according to the regulations of each autonomous community.
The taxable base is obtained by applying the applicable reductions to the taxable base, applying first the State reductions and then those created by the autonomous community itself.
The Autonomous Communities and the Foral Territories (in the autonomous communities of the Basque Country and Navarra) have made use of the powers attributed to them to establish in their territory a series of reductions in the taxable base of the tax.
The determination of the Inheritance Tax tax rate to be paid by the taxpayer is obtained by applying the multiplying coefficients to the full rate, established based on two different factors:
- The kinship groups established for the application of reductions in the tax base;
- The pre-existing assets of the purchaser (who will be the taxpayer or taxpayer).
taxpayers may choose to file according to art. 64 Regulation of the Inheritance and Donations Tax Law, RD 1629/1991 of November 8, 1991.
a) A declaration, that is, the documents necessary to settle the tax directly before the competent Tax Administration, so that it proceeds to the examination, qualification, verification and practice of the corresponding liquidations.
b) A self-assessment, in which case it is the taxpayer himself who must carry out the necessary operations to determine the amount of the tax debt and accompany the self-assessment with the document or declaration containing or verifying the taxable event.
What happens if the Inheritance Tax is not paid.- If the heir does not pay the Inheritance Tax either because he does not present the self-assessment or because he has presented it, and has not made the payment, it can lead to sanctions and interest .
All the heirs must present the self-assessment, in the event that there are several heirs, and the vast majority present and pay the tax within the established period, they will not be affected by sanctions, surcharges or late interest, only the one who does not present will be responsible or do not pay the tax on time, which will have to face the possible economic consequences.
The self-assessment of the Inheritance Tax is not presented
In this case, the heir will face the payment of late-payment interest resulting from the period elapsed from the end of the self-assessment until the Administration regularizes the tax situation.
The amount to be paid will be the result of multiplying the amount of the fee not paid by the annual interest rate established in the General State Budget Law between the expiration date of the self-assessment and the actual payment.
In addition, the subject is incurring in a tax offense for which he may be fined with a penalty from 50% to 150% of the tax defrauded, depending on the circumstances.
This sanction may be reduced through voluntary regularization, that is, presenting the self-assessment of the tax before the Administration begins the corresponding process so that the surcharge is 5%, 10%, 15% or 20%, depending on the late payment, and without penalties or interest for late payment.
The subject who does not present the self-assessment of the Inheritance Tax does not appear could be committing a crime of tax fraud. In this case, he could be sentenced to jail and pay a fine along with late-payment interest.
The Inheritance Tax self-assessment submitted, but payment has not been made.- The heir submits his self-assessment (both within and after the term), but has not made the payment of the tax, nor has he requested the postponement or installment of the payment of the debt .
In this case, if the debt is paid before the Administration issues the enforcement order, a 5% surcharge will be applied. If it is paid once the enforcement order has been issued, there will be a 10% surcharge. And if the debt is not paid within the period indicated in the enforcement order, it will entail a 20% surcharge.