FISCAL PLANNING THROUGH THE WILL

FISCAL PLANNING THROUGH THE WILL

 

Many people who come to the Notary have the mistaken idea that if a will is not made, more taxes will be paid for the succession.

This idea is, from a theoretical point of view, radically false, since the rules governing the taxation of inheritance are the same, whether or not there is a will.

However, from a practical point of view, through the will, we can order the succession so that it has the lowest possible tax cost, provided that its wording takes into account the inheritance tax regulations, allowing the heirs to use option economies that minimize the tax impact of the succession .

In addition, making a will is always an exercise in reflection, which if it entails a correct organization of assets, especially those of businessmen, means that tax costs can be very controlled.

Having said this, general tax planning rules cannot be established, since each inheritance has so many nuances, which constitute unique phenomena. Despite this, we are going to try to give a series of rules, or rather advice so that the will is fiscally efficient:

1.- No.or it must generate conflicts between the heirs.

First, the will It should not generate conflicts between the heirs, because despite the fact that the distribution of the inheritance cannot be made, the obligation to pay the corresponding taxes subsists.

So that conflicts do not arise, it is convenient that the will be very well written, and in anticipation that a successor may cause problems, determine that any judicial challenge of the succession will imply for the one who raises it to receive exclusively, what is legitimate. corresponds to it.

I would also like to highlight how convenient it can be to explain the motivations that have been taken into account to make the will in a certain way.

2.- We must make sure that we meet certain requirements regarding assets and heirs.

In second place, It is essential to ensure that the assets that are going to be the object of succession transmission and the heirs meet the necessary requirements to enjoy the corresponding reduction in the tax base.

To give some examples, there are frequent cases in which the right to reductions for habitual residence have been lost due to a change in the registration of the deceased, for various purposes (for example, to be treated by a certain doctor), without there being a real change. domicile; companies with significant billing levels that do not meet the requirements for their transmission to be subsidized in the 95%; Late disability petitions, the resolution of which is obtained after the death of the deceased.

3.- It must allow several formulas to execute the sequence.

In third place, allow the heirs to opt for various formulas for the execution of the succession so that they choose the one they consider most beneficial, both from the point of view of their personal and fiscal interests.

The lack of this provision means that the only instrument to be used is resignation, which either leaves the resignor without assets, or requires payment for transmissions unrelated to the succession itself.

Examples of such clauses would be allowing the spouse to renounce his status as heir while retaining the usufruct, or allowing the heir to verify the disposition in his favor or in favor of him and his children..

4.- We must anticipate the consequences in other taxes.

And finally, fourthly,  It is convenient that the future consequences of the succession in other types of taxes and the advisability or not of transmitting the assets while alive are analyzed very carefully.

In other words, all the decisions that are adopted due to the inheritance tax must bear in mind the consequences that may arise in the income tax and municipal capital gains and opt for those decisions that are most beneficial from the fiscal point of view, but analyzing the entire operation as a whole.

These lines may lack some specificity, but this is due to the breadth of the matter we are dealing with.

With this, we simply want to remind you of the convenience of correct advice on all kinds of succession issues.

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