Inheritance tax Extremadura

Extremadura 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.

Extremadura is a clear example of that.

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 their relationship had been Constituted and Inscribed as being ruled under Extremadura Law “ Parejas de Hecho”. And even, in any Council or Comunidad Autónoma, from 31 March 2023. From this date, an inscription in an EU or EEE country registry will be enough. And also the notarial deed where the pareja de hecho was agreed will be valid.

There are extra advantages for close kin and disabled people.

The reductions on the value of the acquired assets («Base Imponible») for descendants under 21 and disabled people are slightly higher than those ruled by the state law. There are different reductions according to the grade of disability -from 33% to under 50% (60.000) from 50% to under 65% (120.000) and 65% or over (180.000) .

More importantly:

.-Descendants under twenty one have a benefit of 99% of the total tax to be paid. («Couta Líquida»)

.-Descendants over twenty one, as well as ascendants, and spouses can have a deduction of between 90% and 99% , if their previous wealth is under 600.000 €. , as in the following table:

99%, If the value of acquisition ( Base Imponible) is 175.000 € or less

95% If the value of acquisition ( Base Imponible) is 325.000 € or less

90% If the value of acquisition ( Base Imponible) is 600.000 € or less

In all cases , including life insurance policies if any

In Extremadura there is also a reduction of the value of the Base Imponible of up to 175.000 € for ascendants, descendants or spouses, depending on the reductions that have already been applied, provided that the total amount of the inheritance is under 600.000 € and the previous wealth of the beneficiary is under 300.000 €.

This reduction is incompatible with the deductions in the table above and therefore depends on the choice of the beneficiary, and this must be carefully studied. The calculator only takes into account the deductions from the cuota in the table.
Please contact us if you need further advice..

In Extremadura there are peculiarities related to the reduction of the value of the house which has been the habitual residence of the deceased and in the acquisition of an individual enterprise, professional business or share in a company.

Since the 25 of January of 2018

Acquisitions by ascendants, descendants and spouse receive a deduction of 99% of the Couta.It is necessary to present and pay within the time limit ( six months from the date of death) to take advantage of it.

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

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