Valencia has its own inheritance tax regulations as a result of the Spanish State ceding the tax revenue of inheritance and gift tax to Comunidades Autónomas, along with some regulatory autonomy to adapt tax to the particular circumstances of the respective Comunidad Autónoma.

This means that most Comunidades Autónomas have ruled new (and huge) benefits compared to those established by the Spanish State.

While the tax scheme and regime is the same in all parts of Spain, the Comunidades Autónomas took advantage of the given power to fix higher thresholds, or different rates or direct reductions on the amount to be paid (and sometimes all of these) to benefit close relatives of the deceased or disabled people. There are also benefits that help promote local business, farming, etc. as well as in the acquisition of the Comunidad Autónomas’ cultural assets.

However, the Comunidades Autónomas change their regulations quite frequently so it is necessary to check the regulation in force at the time the tax is due (the day of death).

For ascendants, descendants and spouses, under Valencia Comunidad Autónoma  laws the benefits are greater than those ruled by Spanish state law,  with a tax allowance of 100.000 € as well as a deduction on the total amount of tax due (if any) over that threshold of 99%. The deduction of the tax burden may be also up to 75% for disabled people, even if they are unrelated.

Non-married couples constituted according to the Comunidad Valenciana`s law of Uniones de Hecho Formalizadas de la Comunidad Valenciana” and inscribed in its own Registry have the same rights as married couples.

In Valencia there are peculiarities related to the reduction of value of the house which has been the habitual residence of the deceased and in the acquisition of an individual enterprise, professional business or share in a company.

There is a  reduction in the value of the individual business or share in a company of 99% of the value.  This allowance extends not only to ascendants, descendants and spouse, but also to siblings, uncles, aunts,  nephews and nieces.

Beneficiaries who are professional farmers  («profesional de la agricultura») have a reduction of 99% of the value of rural land if it is inherited by an ascendant, descendant, spouse, sibling, uncle, aunt, niece or nephew.

The same reduction applies if the beneficiary (any) sells the inherited land to a professional farmer within the year of acquisition or transfers it to the «Red de Tierras».

The Land must be kept in the property of the acquirer for five years.

All these cases are accounted for in the calculator

The question now is who can take advantage of these benefits:

• If the deceased was a resident in Spain, the inheritance tax law of Valencia is applicable if the deceased lived there for most of the five years immediately prior to death.
  If the deceased had lived longer in another Comunidad Autónoma than that in which they had their last residence, within this last five year period, that Comunidad Autónoma’s rule will be applied.
• If the deceased was a non-resident in Spain, BUT the beneficiary is, the tax payer can choose to apply the rule of the Comunidad Autónoma where the most valuable assets are located and, if there are no assets in Spain, the Law of the Comunidad Autónoma where they live.
• In cases where both the beneficiary and the deceased were non-residents, the tax payer can choose the law of the Comunidad Autónoma where the most valuable assets are located.These options for non-residents, are the result of a long process that has evolved in Spanish Law since the European Court of Justice resolution of September 2014.
  

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