The liquidation of the inheritance tax on inheritances with usufruct

Inheritances with usufruct apply special rules to settle taxes

Inheritances with usufruct consist of the surviving spouse receiving the life usufruct of the properties. In this way, they will continue to enjoy the property and when it passes away, the children who “consolidate the domicile” would become full owners.

In this type of inheritance, the tax settlement establishes a series of special rules. In this case, we will know the applicable rules when settling the Corporation Tax. The most important criteria will be:

  • He usufruct is valued at a certain percentage of the value of the property, which varies according to the age of the usufructuary.
  • Children must pay the tax for the rest of the value of the property, until reaching 100% of it. But they must do it applying the type of tax that would have corresponded to them if they had inherited the full property.
  • Later, when the surviving spouse dies, the children pay the tax for the “consolidation of the domain”, but according to the conditions existing at the time of the death of the first parent.

 B Law & Tax
International Tax & Legal Advisors

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Tags: Inheritance, Taxes, Inheritance Tax, Settlements, Usufructs, Expatriate advising, tax advice madrid