When receiving an inheritance, one must consider several expenses associated with the process. What are the main costs involved?
These costs are linked to the bureaucratic and other necessary fees involved in resolving succession issues, as noted by the Saldo Positivo website of Caixa Geral de Depósitos.
“Inheritances are often a source of conflicts. Yet, even when the division of assets is carried out amicably, beyond the formalities required upon the death of a family member, the process until the assets are transferred to your possession is not free of costs,” the portal states.
The law outlines the costs of an inheritance and the order in which they should be paid:
- Funeral expenses;
- Administration costs of the inheritance;
- Debts of the deceased;
- Fulfillment of bequests (assets assigned to specific persons by will; for instance, a house designated to family member Y).
What are the costs involved?
Saldo Positivo further outlines some of the specific costs involved:
- Requesting a death certificate – “If requested through the Civil Online platform, you pay only half (10€) of what you would pay for a paper document. However, if the paper death certificate is for submission to Social Security or for family allowance purposes, you pay only 10€”;
- Heir qualification – “The base value, applied when there is no registration, is 150€ (plus 50€ if the heir qualifications of husband and wife are done together). A qualification with property registration costs 375€. If the registration includes the sharing of assets, the price is 425€. Additional costs related to property registration and database consultations apply”;
- Resorting to inventory – “If you resort to a notary office, you will incur notary fees, which vary according to the complexity of the process. The request can be made online, through the Inventories platform”.
- Taxes – “Receiving an inheritance can entail tax expenses. The declaration of the inherited assets subject to taxation must be made by the family head by the end of the third month following the family member’s death. This information is provided through Form 1 of the Stamp Duty and its annexes. This document informs the Tax Authority (AT) of the death and declares the existing assets at the time of death, also identifying the heirs. This way, the AT can notify the inheritance beneficiaries if it’s necessary to pay the Stamp Duty, which is 10% of the inheritance value.
Concerning IRS, only the income generated by the inherited assets is subject to taxation. For example, this applies to rental income from properties. If it is an undivided inheritance (i.e., before being shared), each heir will be taxed on their share of the generated income.
After the inheritance is shared, each heir is responsible for paying the taxes related to the assets they received, such as IMI (for properties) or IUC for vehicles.
Regarding properties, attention should be paid to the Additional to the IMI (AIMI). If the inheritance has not yet been shared, the family head must identify the heirs and their corresponding shares by the end of March.
In the following month, the heirs must confirm this information. Even if the undivided inheritance has a taxable patrimonial value exceeding 600,000€, each heir is taxed individually, which may reduce or eliminate the AIMI payment.”
