Inheritance tax Cataluña

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).

In Cataluña there are bigger benefits for life insurance, kin and disabled people.

There is a special right to reduce the value of the assets up to an amount of 275.000 for ascendants, descendants and spouses over 75 years of age, which is incompatible with any reduction for disability.

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”.

In Cataluña the rates are slightly lower than in State law, and from 1-2-2014 there is a deduction of up to 99% for the spouse.

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

From the first of May 2020 :

.-Spouses maintain the same percentage of reduction, and also first degree descendants under 21 years of age, but the percentage of deduction decreases slightly for ascendants or descendants over twenty one.

.-The surcharge based on the existing wealth of the beneficiary, aimed to get a more equitable distribution of wealth, will also be applied to beneficiaries who are ascendants and descendants, from 1% for an existing wealth of the beneficiary under 500.000 €, to a surcharge of 1.2% for beneficiaries with existing wealth worth more than 4.000.000 €

This deduction, from the first of May 2020, does not apply if the tax payer opts to take advantage of the reductions ruled for the acquisition of an individual enterprise, professional business, share in a company, or agricultural assets; assets from “ Patrimonio Cultural” or “ Patrimonio Natural”

Regarding the reduction of the value of the house which was the main personal residence of the deceased:

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

The reduction reaches 95%.

The limit increases to 180.000 € per tax payer (or 500.000 for the whole reduction).

Regarding 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 reduced to 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 resident in Spain, but for less than five years at the time of death, no Comunidades Autonomas Law will be applicable, BUT Spanish State Law 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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