The inheritance tax is a tax burden that everyone in Spain must face when receiving an inheritance. In fact, this is so even if we reside in an autonomous community that subsidizes it or applies exemptions. Because many people take a long time to be able to make effective the will that they received from their parents or from any other friend, spouse or relative, the question of when it prescribes the inheritance tax skips, if it does. Here we are going to see it.
What is the inheritance tax?
This tribute is officially known as Inheritance and Gift Tax. Everything related to it can be found in Law 29/1987, of December 18, and in Royal Decree 1629/1991, of November 8. It is regulated by the autonomous communities and taxes all assets that have been acquired by a natural person through a legacy, an inheritance or a donation. The difference between these last two concepts is based on whether the transmission has occurred ‘mortis causa’ (death) or ‘inter vivos’ (by agreement between living people).
What does the law say about the inheritance tax prescription?
However, taking into account the statute of limitations on inheritance tax, the legislation in force contemplates a period of 6 months for its voluntary submission. Said period shall start counting from the same day on which the causing event occurred, that is, the death of the testator. In addition, in some autonomous communities it is possible to extend it for another 6 months, alleging that there are problems to quantify the amount of the inheritance and, therefore, to calculate the value of the tax.
In any case, the law specifies that, during that time, the beneficiaries must present the pertinent settlement to an authorized body.
What happens if you don’t file the settlement within the voluntary deadline?
Contrary to what many interested parties believe, once that period has elapsed, the inheritance tax prescription does not take place. To do this, you have to wait considerably longer. Simply, the period of time granted by the Tax Administration for its presentation ends.
The provisions of article 27 of the General Tax Law come into play here. This refers to the surcharges to which the person obliged to carry out the taxation, that is, to pay the inheritance tax, will have to face for not having done it within the voluntary period.
The percentage of surcharge to be paid will depend on the amount of time the taxpayer takes. However, in general, a surcharge of 5% is usually imposed when presenting the settlement between the seventh and the twelfth month after death. Similarly, between the first year and the second this surcharge grows to 10% and reaches 15% between the second and third. Finally, it reaches 20% between the third and fourth years.
eye! This does not mean that if the beneficiary of the inheritance does not present the pertinent statement of liquidation in the first six months after the death occurs and is subsequently discovered, he will only have to face the payment of the mentioned surcharges. Additionally, and in accordance with the provisions of article 28 of the General Tax Law, the Treasury may also impose sanctions.
On the other hand, if the subject does not present the liquidation of the inheritance tax before the voluntary term is exceeded, he will lose the right to receive any bonus or exemption from the autonomous community in which he resides. This supposes a real risk since, in the majority of occasions, the Tax Administration usually realizes its non-presentation and demands payment.
So when does the inheritance tax prescribe?
After what has been said previously, you have already made an idea. Specifically, the statute of limitations for inheritance tax occurs once four years have elapsed since the death of the person causing the inheritance. If in that period of time the voluntary presentation of the liquidation has not occurred nor has there been a specific requirement from the Tax Administration, the beneficiaries will not have to face the payment of the tax.
The requirements of the Treasury and its incidence on the statute of limitations for inheritance tax
This is another point that generates doubts among the beneficiaries. Many of them believe that, despite having received the requirement, if they manage to lengthen the process enough for the 4 years that we have referred to above to elapse, the tax prescribes and the obligation to pay it as well.
However, this is not so. A sine qua non requirement for the inheritance tax to prescribe is that the Tax Administration has not initiated any action aimed at collecting the debt. If it does, the statute of limitations ceases to be effective and the beneficiary of the inheritance will have to pay yes or yes. The same happens if the subject files any type of claim or resource.
In any case, although the beneficiary subject may be subject to a sanction and be forced to pay a surcharge on the tax, if those 4 years elapse without receiving news from the Administration, they will not have to face these increases either.
Do I have to pay the prescribed inheritance tax?
Sometimes, the Tax Administration of the autonomous community in which the deceased habitually resided requests payment after those four years have passed. This is where the question arises whether it is necessary to pay the prescribed inheritance tax, even if it is only a formal procedure.
The answer is no. By liquidation is meant paying the tax and, obviously, once it has prescribed, it is no longer necessary. Therefore, even if a notification arrives, we can file a claim alleging that its validity is no longer in force and ignore everything else.
Some conclusions on inheritance tax and its prescription
Can we get rid of paying inheritance tax? Yes, it is a real possibility. However, it is highly improbable that, after the voluntary term has elapsed, the Public Administration does not realize the error and notifies the beneficiary what to do with the payment, with the consequent surcharges, penalties and loss of bonuses and exemptions.
Having said that, our advice is that you should take advantage of the voluntary period to pay the amount of inheritance tax in all cases. Since, in the long run, not doing so means tossing a coin in the air with a high risk that, in the end, we will have to end up paying a much higher amount than what was initially stipulated. So you better not play it.