Inheritance tax Cataluña

Inheritance Tax in Cataluña includes specific regional allowances and reductions for spouses, children, disabled beneficiaries and inherited property. Tax liabilities can vary considerably depending on the family relationship, the value of the inheritance and the beneficiary’s residency status.

This guide explains how inheritance tax works in Cataluña, including allowances, deductions, life insurance benefits and tax rules for residents and non-residents in Spain.

As you may already know Cataluña 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).

Unmarried couples have the same rights as married couples provided that the relationship meets the requirements demanded by the Catalonian regulation of “ Pareja Estable”

Those in a relationship constituted under Cataluñas’ “ Convivencia de Mutua Ayuda” have very similar rights in order to benefit from the reduction by kinship, disability, or value of the house which was the habitual residence of the deceased.

The sons or daughters of the spouse or of the unmarried partner, are considered as sons or daughters of the deceased, so in the calculator you must choose the son/daughter option instead of “step child”.

Descendants under 21 years of age have a tax free allowance of 100,000€, plus an extra 12,000€ for every additional year under 21.

Children aged 21 or over, and the spouse benefit from a threshold of 100,000€ 

Other descendants: 50,000€

Ascendants: 30,000€

Siblings, uncles, aunts, nephews and nieces, ascendants and descendants by marriage: 8,000€

Cousins, distant relatives and unrelated beneficiaries do not benefit from any tax free allowance.

For acquistions resulting from life insurance policies there is a tax free allowance  of 100% up to  a limit of 25,000€ for spouses, ascendants and descendants.  For group policies or those contracted by businesses on behalf of their employees, the degree of kinship between the insured and the beneficiary will be taken into account.

for spouse of 99% on the tax owed.

for ascendants and descendants on a variable percentage depending on the value of the acquisitions (Please Check using our calculator).

A surcharge aimed at achieving a  more equitable distribution of wealth, will also be applied depending on the existing wealth of the beneficiary and closeness of kinship, ranging from multiplied by 1 for descendants with a wealth of under 500,000€ , to multiplied by 2 for unrelated beneficiaries with an existing wealth of more than 4.000.000 €

Reduction of the value of the house which was the main personal residence of the deceased: 95%

Ownership must be retained for five years.

The limit of the reduction 500.000 € will be split among the beneficiaries with a minimum of  180,000€ for each beneficiary.

Reduction for the individual enterprise of the deceased or professional business or, his or her share in a company:

In Cataluña the period for which ownership must be retained is five years.

The beneficiary of this reduction does not have to be related to the deceased provided that he or she has been an employee or has provided services during a period of ten years of which at least five must have been in management or in some other position of responsibility.

If the share is in a company defined as “sociedad laboral,” the reduction increases to 97%.

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

• If the deceased was a resident in Spain, the inheritance tax law of Cataluña 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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