Heirs have until tomorrow to say how they want to be taxed – Executive Summary

The deadline for administrators of an undivided inheritance to inform the tax authorities how they want the additional IMI paid ends tomorrow, at the end of March. The choice is important because it could mean not paying anything.

Inheritances that have been accepted by successors but there are no shares yet will pay additional municipal property tax (AIMI). All estates with a value of tax assets (VPT) at stake exceed 600 thousand euros, if there is no agreement between the heirs. This measure, which was established with the 2017 state budget, provides for taxation of heirs, in their share.

The AIMI rules stipulate that an undivided inheritance, represented by the head of the spouses (inheritance administrator), can be subject to this tax. In other words, the group of property constituting the assets to be shared can, within the scope of an undivided inheritance, be subject to effective AIMI taxation, when the total VPT of this property exceeds EUR 600 thousand. Anyone who chooses to file joint taxes can double these amounts.

The additional IMI consists of three levels: for natural persons with real estate assets worth more than EUR 600 thousand and up to EUR 1 million, 0.7% applies; Above one million or even two, the percentage rises to 1%. Of this amount, a rate of 1.5% is applied.

However, the legislator allows this tax to pass into the domain of the heirs as long as there is effective action by the head of the spouses and confirmation of the data by the heirs he mentioned. Objective: Distribute the real estate assets that constitute the inheritance (construction land and houses) and avoid AIMI or pay higher taxes.

To this end, the head of the couple will have to submit an electronic declaration, specifying all the heirs and their shares in this inheritance, by March 31. The heirs will have to confirm these declared shares, also through a declaration, in the period from April 1 to April 30.

By following these procedures, an undivided inheritance is no longer taxable in AIMI, with the new tax falling on the heirs, which can be useful when there are multiple heirs. The new tax falls on each heir in his share, thus dividing the value. Remember, however, that each heir's share of the VPT for the estate or estates constituting the inheritance will also be added to the VPT for the other estates that appear in the matrix in the name of the heir (as owner, beneficiary, or property holder right to appear).

For example, an undivided inheritance of a property worth €750,000 falls within the AIMI range: 0.7% on the value over €600,000, i.e. €150,000. However, if there are two heirs, the value decreases to 375 thousand euros, thus avoiding the tax on the installments related to the share of each of the heirs from the inheritance if the head of the spouses submits the aforementioned declaration to the tax authorities.

Without the delivery of this declaration and the subsequent confirmation of the declared shares, AIMI falls on the undivided inheritance, that is, the assets accepted by the successors, but for which there are no shares yet, because they are equivalent to the legal inheritance of persons (companies or equivalent urban buildings intended for housing). Therefore, taxes take into account the real estate assets of the undivided inheritance fully.

Each case is different, so the choice must be made by simulating taxes in one scenario or another.

AIMI is a tax that was first imposed in 2017 and is imposed on the sum of the taxable heritage values ​​(VPT) of urban buildings intended for housing, owned by natural or legal persons, and which appeared in the property matrices in January.

This tax replaces stamp duty, which applied a rate of 1% to every property worth more than €1 million.

Here are the dates you should pay attention to:

From March 1 to March 31: Deadline for the delivery of an undivided inheritance, through the head of the spouses, the declaration identifying all heirs and their shares, if you wish to avoid treating the inheritance as a legal entity, for AIMI purposes, as provided for in Article 135. The IMI code.

From April 1 to April 30: Deadline for each of the heirs to submit a declaration confirming their shares in the undivided inheritance, declared by the head of the spouses, if they wish to exclude the equality of the inheritance with a legal person, for the purposes of AIMI, as provided for in Article 135°e of the IMI Law.

From April 1 to May 31: Deadline for taxpayers who are married or in a de facto union to file the declaration to elect joint tax, for AIMI purposes, if not done in the previous year or to give up the previous election, as provided in Section 135-D of the IMI Code / Deadline for taxpayer submission Taxation Married couples under community property regimes, who do not elect to be taxed jointly for the purposes of AIMI, must make a joint declaration specifying which properties are their own assets and which are the joint property of the spouses, if they wish to be taxed individually depending on their premises and their share of the joint property, as provided It is stated in Section 135-D of the IMI Act.

From September 1 to September 30: Payment of AIMI due by individual or collective taxpayers who, on January 1, 2018, own urban buildings classified as “housing” or “building land”.

Up to 120 days after the tax payment deadline: Correct the choices made.