Have been sick at home with a stomcah virus for a couple of days, yes, we lawyers get sick too :)
Back to work with full strength to keep fighting Banks and associated bugs... for the benefit of society :). but also answering fun questions on IHT.
Today´s one:
Question: My recently deceased uncle's villa goes to my mother and uncle (no will). Its tax valuation is 856000 for 2011. He died in October 2010. Mortgage remaining is of 148000. We estimate 240000 approx IHT? Is there a charge to extend IHT payment? Lawyer does not seem to be able to give us figure as apparently there is local tax still to be paid on behalf of my uncle. Do they need NIE number also? If we let it go to repossession would they receive anything at all if sale was 50% of value and mortgage cleared? We don’t know what to do as it is so much money to find and feel there will be more fees to pay going forward. Thanks so much.
Answer:
I take that probate has been made according to Inheritance Law of your uncle´s nationality and that the naming of your mother and your uncle is correct.
I am answering some of your questions below:
1. - Deadline for the payment of the corresponding tax is of 6 months since death. So in your case you have till April 2011. You can ask for a 6 month extension with delay interests attached. The Treasure department has four years to request payment from you after which the tax is expired.
2. - A gross calculation of the payable tax is:
Taxable amount is value less mortgage: 708.000 €. Mom/Uncle as heirs will inherit half of these each: 354.000 € each.
Applying Andalucía rules, they can have a reduction on the taxable amount of 7993, 46 €.
Having 346.006,54 € as taxable Amount Andalucía charges each one of the heirs an amount of 106.724,63 €
3. - The Local tax cannot be other one than IBI tax, whose value is easy to find out in the corresponding department of the Local Council ( Contribución Urbana)
4. - NIE is necessary
5. - Yes, they are holders of rights of any remaining amount after repossession. You need to communicate to the Bank heirs and address of heirs to be noticed if repossession started.
Huge charges indeed. You can ask this or other Bank for financing of the IHT amount against the own house. It would be a shame if the Bank took the property that is almost paid out. I would advise you to look for financiation for this.
Why do not start an association for prople like you so under certain criteria you can get financiation help from a good Bank with some sharing of rights with them. I can ask a good Bank around if they were up for creating this product for you. A kind of inverse mortgage for the payment of the Inheritance taxes.
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