La Rioja

Inheritance tax La Rioja

La Rioja 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.

La Rioja 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).

There was a deduction of up to 99% of the total amount to be paid by ascendants, descendants or spouses. This benefit is dependant on whether the beneficiary has been a resident in La Rioja for the five years prior to the opening of the succession.

From 1/1/2016 the 99% deduction depended on whether the individual inherited benefit, once the ruled deduction had been applied ( Base liquidable) was under 500.000. If it was over, the deduction was limited to 98%.

Since the 1/2/2020, the deduction for ascendants, descendants and spouses is still 99% of the amount to be paid if the » Base liquidable» ( the individually inherited amount with any reduction applicable) is under 400.000 €.

If the individual inherited amount ( Base liquidable) is over 400.000 €, the cuota to pay for the acquisition which exceeds 400.000 € will «only» be 50%.

To use the calculator, if the individual acquired amount exceeds 400.000 € you must do two calculations
1º.-Calculate the tax for all the individual inherited acquisitions ( quota) without any deduction from the cuota.

2º.- Calculate the tax for the individual acquisition limited to a value of 400.000 €

3º.-Subtract 2º from 1º

4º.-Apply a 99% reduction to 2º

5º.-Apply a 50% reduction to the result of 3º

6º.-Add 4º and 5º to find the total of your tax duties

Of course we are here to help if any is needed.

In La Rioja there are peculiarities related to the reduction of 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.

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

  • If the deceased was a resident in Spain, the inheritance tax law of La Rioja 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.

  • Any Questions?

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