The most common reliefs in Catalan inheritance tax

Figures as at December 2022, when this article was published. Please check the current amounts with us before making any decision.

When we acquire assets or rights by inheritance or gift, we must pay Inheritance and Gift Tax (Impuesto de Sucesiones y Donaciones) in order to take ownership of what we receive, regardless of any other taxes that may also be due. In this article we focus on inheritance — the part of the tax that applies to acquisitions by inheritance, legacy or any other title of succession.

The tax is progressive, which means it varies with the amount acquired: the larger the gain, the greater the tax impact. However, reliefs can be applied, so the taxable amount is obtained as follows:

Tax base – Reliefs = Net taxable base

As you can see, reliefs reduce the net taxable base, so it is advisable to assess in advance whether any of them may apply: if they do, the tax bill will be lower. Below is a brief explanation of the reliefs most commonly applied in Catalonia.

Relief for kinship

This relief depends on the degree of kinship between the deceased and the person inheriting. Each degree forms a group, and each group has its own relief:

a) Group I: acquisitions by descendants under 21. Applicable up to a maximum of €196,000.

b) Group II: acquisitions by descendants aged 21 or over, spouses, stable partners and ascendants.

• Spouse or stable partner: €100,000.
• Child: €100,000.
• Other descendants: €50,000.
• Ascendants: €30,000.

c) Group III: acquisitions by second- and third-degree collateral relatives and by ascendants and descendants by marriage: €8,000.

From the fourth degree onwards, the kinship relief no longer applies.

If you have questions about degrees of kinship, see this chart: degrees of kinship (PDF, in Catalan).

Relief for disability

This relief applies to heirs with a recognised degree of disability and, as with the kinship relief, the amount depends on that degree:

a) A degree of disability of 33% or more: relief of €275,000.

b) A degree of disability of 65% or more: relief of €650,000.

The disability must be proven through a decision of the Catalan Institute for Social Services (ICASS), the National Social Security Institute (INSS) or a court judgment.

Relief for older people

This relief of €275,000 applies to people who fall within Group II by reason of their relationship with the deceased and who are aged 75 or over. It also applies to acquisitions on death between members of a mutual support cohabitation arrangement. It cannot be combined with the disability relief, so if both could apply, you must choose the more advantageous one.

Relief for life insurance

When the beneficiary of a life insurance policy taken out by the deceased is the spouse, a descendant or an ascendant, this relief applies up to a limit of €25,000.

Relief for the deceased’s main residence

When the acquisition includes the deceased’s main home and the person inheriting is the spouse, stable partner, a member of a mutual support cohabitation arrangement, a descendant, an ascendant or a collateral relative, a relief of 95% of the value of the home may be applied, up to €500,000.

However, if the beneficiary is a collateral relative, they must be over 65 and must have lived with the deceased for at least the two years before the death.

The home must also be kept for five years: if the heir sells it within that period, they must repay the tax saved thanks to the relief. The heir’s personal plans should therefore be considered too, as depending on them it may or may not be advisable to apply this relief.

Conclusion

These are the best-known and most commonly applied reliefs, but the law provides for a range of reliefs, deductions and allowances with various particularities that may be worth considering. That is why a prior assessment is needed to decide when and how they can be applied.

In short, planning an inheritance from a tax perspective is key to reducing its financial impact.