Inheritance Tax DeductionsIn Cataluña

This presentation has been updated and is valid for 2014.

Inheritance Law in Cataluña

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There are special regional tax deductions and exemptions

passed by the local government in Cataluña that only apply

to those beneficiaries who have been resident in the region.

Inheritance Law in Cataluña

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If you have NOT been resident in Cataluña then, when

determining your inheritance tax liability, you may only apply

the deductions and exemptions approved by the CENTRAL

government.

Inheritance Law in Cataluña

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The central government exemptions and deductions are not

as generous as the regional exemptions.

This has caused complaints that the inheritance tax laws in

Spain are discriminatory against non-residents.

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Inheritance Law in Cataluña

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The regional level exemptions available in Cataluña were

brought into force by the Barcelona parliament and in their

current form are laid-out in Law 19/2010.

The most important deductions available are as follows:

Inheritance Tax Law Cataluña

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Spanish Inheritance law first assigns beneficiaries to groups according to the degree of kinship with the deceased:

Group I Children, including adopted children, under the age of 21

Group II All other descendants, spouses and parents

Group III Close relatives such as brothers and sisters, grandparents,

aunts and uncles

Group IV More distant relatives

Personal Deductions

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The following are the additional deductions available in Cataluña:

Personal Deductions

  Deduction

Group I Deduction of €100,000 plus €12,000 for each year under 21 years of age up to €196,000

Group II Spouse: €100,000; Child: €100,000; Other Descendants: €50,000; Parents: €30,000

Group III €8,000

Group IV No deductions available

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Where an heir is disabled:

In addition to any personal deductions applicable a

beneficiary who is disabled may add an additional €275,000

deduction if the disability is determined to be > 33% or

€650,000 where it is > 65%

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Where the beneficiary is over 75 years old

A deduction of €275,000 may be applied where the heir is

over 75 years of age who is a beneficiary within Group II

though this deduction is incompatible with earlier

deductions

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Inheritance of the Family Home:

Where a property inherited is the main family home then a

reduction amounting to 95% of the value of the property up

to €500,000 may be made where the beneficiaries are the

spouse, child or parent of the deceased

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Inheritance of the Family Home:

The property may not be sold for a period of 10 years if the

exemption is taken advantage of.

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Deductions available for the Inheritance of the Family Business

A tax deduction of 95% of the value of the interest held by

the deceased in the business

This applies to all beneficiaries who were related to the

deceased to the third level of consanguinity and persons in

the employ of the business for at least 10 years

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Deductions available for income from Life Insurance Policies

A deduction of 100% is applicable on any income from a life

insurance policy held by the deceased up to a maximum of

€25,000 where the beneficiary is the spouse, descendant or

parent of the deceased

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Special Deductions - Spouse

After applying the aforementioned deductions a discount of

99% shall be applied to any tax payable

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Special Deductions – Other Relatives Groups I & II

For Group I & II beneficiaries, apart from the spouse, the

following discounts may be applied to the calculated

amount of tax due, depending on the amount inherited:

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Special Deductions – Other Relatives Groups I & II

Taxable amount Discount Applied % Remaining taxable amount Marginal Rate of

Discount %

0 0 100,000 99

100,000 99 100,000 97

200,000 98 100,000 95

300,000 97 200,000 90

500,000 94.2 250,000 80

750,000 89.47 250,000 70

1,000,000 84.6 500,000 60

1,500,000 76.4 500,000 50

2,000,000 69.8 500,000 40

2,500,000 63.84 500,000 25

3,000,000 57.37 and upwards 20

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Special Deductions – Other Relatives Groups I & II

The discount shall be reduced by 50% should the

beneficiary apply any of the following deductions:

• Family Business

• Any other deduction to the amount of tax payable except

the deduction applicable to the family home

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Once all deductions have been applied the final amount of tax

payable is determined then it is necessary to apply the relevant

rate:

Inheritance Tax Rates in Cataluña

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Tax Rates in Cataluña

Taxable Sum

Tax Payable On This Sum

Any Remainder Up To

Applicable Rate on Remainder

0 0 €50,000 7%

€50,000 €3,500 €150,000 11%

€150,000 €14,500 €400,000 17%

€400,000 €57,000 €800,000 24%

€800,000 €153,000 And above 32%

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Existing Wealth

Once the relevant tax rate has been applied the result is multiplied by a coefficient determined by the existing wealth of the beneficiary as well as the group to which they belong:

Group/Coefficient

I & II III IV

1 1.5882 2

Existing Wealth

The Groups referred to consist of the following beneficiaries:

Group I Children, including adopted children, under the age of 21

Group II All other descendants, spouses and parents

Group III Close relatives such as brothers and sisters, grandparents,

aunts and uncles

Group IV More distant relatives

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Each year in Spain thousands of expats pay more

tax on inheritance than they should – simply

because they fail to follow some simple rules.

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To find out how to get expert advice, in English, about how to

reduce your liability for inheritance tax, go to:

Expert Probate Services in Cataluña

Expert Probate Services in Cataluña

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