Introduction

Catalonia, formed by Barcelona, Lleida, Girona and Tarragona has specific bonifications and reductions on Inheritance Tax. 

The Inheritance and Gift Tax is a state tax. It is regulated by Law 29/1987, of December 18, on the Tax on Inheritance and Gift Taxes and the Regulation that develops it is Royal Decree 1629/1991, of November 8.  But, this national tax can be adapted and improved by regions. So, for Catalonia  region, the Inheritance and Donation Tax is regulated and adapted by the regional law Ley 19/2010, de 7 de junio, de regulación del impuesto sobre
sucesiones y donaciones  and the DECRET 414/2011, de 13 de desembre, pel qual s’aprova el Reglament de l’impost sobre successions i donacions.

In this section we will detail exclusively  reductions, tax rate and bonus  on the Inheriance and Donation in Catalonia  tax. For other aspects as Process of Inheritance, Executing a foreign Will etc, please, visit our Inheritance Process section, where all aspects and procedures may be reproduced in inheritance process independently of the specific executed region. 

Inheritance

Reductions in the tax base

Reduction due to kinship

In acquisitions due to death, a reduction in the taxable base is applied due to the degree of relationship between the purchaser and the deceased person, in the following terms:

a) Group I  (acquisitions by children under 21 years of age and other descendants under 21 years of age): €100,000, plus €12,000 for each year under 21 years of age, with a limit of €196,000.

Children under 21 years of age who are children of the spouse or stable partner of the deceased or deceased person can also benefit from this reduction, because for tax purposes they must be assimilated to descendants.

From 01.01.2022, the relationships between a person who is or has been in foster care and the foster person or persons are assimilated to the relationships between children and parents. Therefore, foster persons who receive assets in inheritance, legacy or any other succession title from the foster person or persons can be considered descendants under 21 years of age for the purposes of applying the reduction. In order to enjoy the benefits of assimilation, the foster care must have been agreed in accordance with the provisions of Law 14/2010, of 27 May, on the rights and opportunities in childhood and adolescence.

b) Group II (acquisitions by children and other descendants aged 21 or over, spouse, stable partner and ascendants):

• Spouse or stable partner: €100,000
• Child: 100.000 €
• Other descendants (grandchild, great-grandchild, great-great-grandchild and great-great-grandchild): €50,000
• Ascendants: €30,000

The reduction for son or daughter and the reduction for ascendants are also applicable in the case of persons who maintain a de facto parent-child relationship who, for tax purposes, are assimilated to those corresponding to descendants and adoptees or ascendants and adoptive parents. For these purposes, de facto parent-child relationships are considered to be the relationships that are established between a person and the children of the spouse or stable partner.

From 01.01.2022, the reduction for son or daughter and the reduction for ascendants also apply between a person who is or has been in foster care and the foster person or persons, because for tax purposes they are assimilated to the relationships between children and parents. In order to enjoy the benefits of assimilation, the foster care must have been agreed in accordance with the provisions of Law 14/2010, of 27 May, on the rights and opportunities in childhood and adolescence.

For the purposes of applying the reduction due to kinship, the members of a cohabitation relationship of mutual help are assimilated to the rest of the descendants of group II.

In order to enjoy this reduction, the surviving cohabitant or cohabitants must prove the existence of the cohabitation relationship of mutual aid by means of the public deed of formalisation of the relationship, granted at least two years before the death of the deceased person, or by means of a certificate of notorietat that demonstrates a minimum period of cohabitation of two years.

c) Group III (acquisitions by second and third degree collaterals and by ascendants and descendants by affinity): €8,000.

Examples of group III relatives:

• Second-degree collaterals by blood: siblings.
• Third-degree collaterals by blood: uncles with respect to nephews and vice versa.
• Second-degree collateral by affinity: siblings of the spouse.
• Third-degree collateral by affinity: nephews, as well as uncles of the spouse (when they are siblings of the spouse’s parents).
• Ascendants by affinity: parents, grandparents, great-grandparents and great-great-grandparents of the spouse.
• Descendants by affinity: spouse of the child and grandchildren, great-grandchildren, great-great-grandchildren and great-great-grandchildren of the spouse.

There is kinship by affinity with the spouse’s blood relatives, therefore, with his ascendants and descendants, with his siblings and with the descendants of the siblings, but there is no kinship by affinity with the spouse of the spouse’s brother.

As for the relationship of the parent’s spouse, with respect to the children of the latter, it is an ascendant by affinity, but for tax purposes it receives the same treatment as the parent and, therefore, must be included in group II of kinship (parent-child relations between a person and the children of his or her spouse).

With respect to the spouse’s children, they are descendants by affinity, but for tax purposes they receive the same treatment as children, and therefore the spouse’s children under 21 years of age must be included in kinship group I and the spouse’s children aged 21 or over must be included in kinship group II (parent-child relations between a person and their spouse’s children).

Kinship by affinity is a consequence of marriage. Therefore, in the case of stable couples there is no kinship by affinity either with the parents of the couple, or with their children, grandchildren, siblings and descendants of siblings.

Kinship by affinity is extinguished by divorce, but not by de facto separation or legal separation. If the widowed spouse marries, the affinity relationship with the family of the deceased spouse is extinguished.

d) Group IV (acquisitions by collateral relatives of the fourth degree or of more distant degrees and by strangers): no reduction is applied on the basis of kinship.

Example of group IV members:

• Fourth-degree collaterals: cousins and cousins
• Other collateral relatives
• Unrelated people

Disability reduction

It is a complementary reduction to the other reductions, which applies to beneficiaries of the inheritance who are legally considered to be people with disabilities.

The amount of the reduction depends on the degree of disability:

• If the degree of disability is equal to or greater than 33%, a reduction of €275,000 applies.
• If the degree of disability is equal to or greater than 65%, a reduction of €650,000 applies.

Accreditation:

• Resolution of the ICASS (or an equivalent body).
• Resolution of the INSS (if it is prior to 27.01.2000 and it is a grade of up to 64%).
• Judgment of legal incapacity.

Reduction for people 75 years of age and older

In acquisitions due to death by people in group II (spouse, stable partner, descendants and ascendants) aged 75 or over, a reduction in the taxable base of €275,000 is applied.

This reduction can also be enjoyed in the case of acquisitions due to death between the members of a mutual aid cohabitation relationship.

This reduction is also applicable in the case of people who maintain a de facto parent-child relationship that, for tax purposes, are assimilated to those corresponding to descendants and adoptees or ascendants and adoptive parents. For these purposes, de facto parent-child relationships are considered to be the relationships that are established between a person and the children of the spouse or stable partner.

From 01.01.2022, this reduction also applies between a person who is or has been in foster care and the foster person or persons, because for tax purposes they are assimilated to the relationships between children and parents. In order to enjoy the benefits that assimilation entails, the foster care must have been agreed in accordance with the provisions of Law 14/2010, of 27 May, on the rights and opportunities in childhood and adolescence.

This reduction is incompatible with disability reduction.

Reductions for insurance

The amount of the reductions depends on the date of contracting the policies and the date of accrual of the tax (which is the date of death of the person causing the tax).

a) Policies taken out after 19.01.1987 and with an accrual date from 01.02.2014 enjoy a 100% reduction, with a limit of €25,000, if the relationship with the deceased contracting party is spouse, stable partner, descendant or ascendant. In the case of group insurance or insurance taken out by companies in favour of their workers, the degree of relationship between the insured person and the beneficiary must be taken into account.

This reduction is also applicable in the case of people who maintain a de facto parent-child relationship that, for tax purposes, are assimilated to those corresponding to descendants and adoptees or ascendants and adoptive parents. For these purposes, de facto parent-child relationships are considered to be the relationships that are established between a person and the children of the spouse or stable partner.

From 01.01.2022, this reduction also applies between a person who is or has been in foster care and the foster person or persons, because for tax purposes they are assimilated to the relationships between children and parents. In order to enjoy the benefits that assimilation entails, the foster care must have been agreed in accordance with the provisions of Law 14/2010, of 27 May, on the rights and opportunities in childhood and adolescence.

The reduction is unique per taxpayer, regardless of the number of life insurance contracts of which they are a beneficiary.

b) Policies taken out before 19.01.1987 have the following tax benefits:

• Exemption from the first €3,005.06 (for each insurance), if the beneficiaries are spouse, stable partner, ascendant, descendant, adoptive parent or adoptee (groups I and II).
• Reduction of the taxable base with the application of the following percentages:
  • 90%, on the excess of €3,005.06, if the beneficiaries are spouse, common-law partner, ascendant, descendant, adoptive parent and adoptee (groups I and II)
  • 50% if the relationship is second-degree collateral (group III)
  • 25% if the relationship is third-degree collateral (group III) or fourth-degree (group IV)
  • 10% if the relationship is collateral of a more distant degree or there is no relationship (group IV)

The exemption and reduction applies to each of the policies taken out before 19.01.1987 and of which the taxpayer is a beneficiary.

c) Concurrence of insurance before and after 19.01.1987.

If a person is a beneficiary of insurance contracts before and after 19.01.1987, one of the two schemes must be chosen, as both cannot be applied.

You can also opt for the regime after 19.01.1987, if you only have policies prior to that date.

(d) Insurance for acts of terrorism and international missions.

The applicable reduction is 100% of the taxable base, for all beneficiaries and without any quantitative limit.

Reduction for the acquisition of the deceased person’s main residence

In acquisitions that correspond to the spouse, the stable partner, the cohabitant in a cohabitation relationship of mutual aid, the descendants, ascendants or collaterals of the deceased person, a reduction of 95% of the value of the deceased person’s main residence can be applied to the taxable base, with a limit of €500,000 for the total value of the home.

To be eligible for this reduction, if the beneficiary of the reduction is a collateral relative, they must be over 65 years of age and must have lived together for at least two years prior to the death.

The joint limit of €500,000 must be apportioned among the taxpayers in proportion to the share they have in the inheritance. As a result of the apportionment, the individual limit for each taxable person cannot be less than €180,000.

The reduction is also applicable in the case of persons who maintain a de facto parent-child relationship which, for tax purposes, are assimilated to those corresponding to descendants and adoptees or ascendants and adoptive parents. For these purposes, de facto parent-child relationships are considered to be the relationships that are established between a person and the children of the spouse or stable partner.

From 01.01.2022, the reduction also applies between a person who is or has been in foster care and the foster person or persons, because for tax purposes they are assimilated to the relationships between children and parents. In order to enjoy the benefits of assimilation, the foster care must have been agreed in accordance with the provisions of Law 14/2010, of 27 May, on the rights and opportunities in childhood and adolescence.

The reduction is also applicable to acquisitions between members of a cohabitation relationship of mutual aid.

Maintenance Rule

The definitive enjoyment of the reduction is conditional on the maintenance of the home, or the surrogate home of equivalent value that becomes the habitual residence of the deceased, in the assets of the purchaser during the five years following the death of the deceased, unless the purchaser dies within this period. This case of subrogation applies whether the amount resulting from the transfer of the deceased’s main residence has been used to acquire the deceased’s habitual residence or if it has been used to repay the mortgage loan or credit granted to the deceased for the acquisition of his or her main residence. In both cases, the subrogation must take place within six months from the date of transfer of the deceased person’s habitual residence.

In the event that the main residence of the deceased has been awarded to more than one person and each of them has applied the reduction for this concept, if before the end of the five-year period the condominium over the dwelling is extinguished, with one of the co-owners awarding part of the rest,  The operation of dissolution of the community entails the loss of the tax benefit for the person who ceases to be the owner of the property, as long as he or she fails to comply with the maintenance requirement indicated. See DGTJ consultation no. 100/20, of 21 January 2021.

Loss of the tax benefit of the right to the reduction

In the event of non-compliance with the maintenance rule, a supplementary self-assessment must be filed for loss of tax benefit that does not include the reduction. The deadline for filing is one month from the day following the date on which the non-compliance or loss of the right to the tax benefit has occurred. This supplementary self-assessment must include the corresponding default interest, which must be calculated from the day following the end of the deadline for filing the initial self-assessment until the day of payment.

Complete information on the reduction in articles 631-17 to 631-19 and 631-30 to 631-34 of Legislative Decree 1/2024, of 12 March, approving book six of the Tax Code of Catalonia, which integrates the revised text of the legal precepts in force in Catalonia on assigned taxes, and in articles 3,  4 and 6 of Decree 414/2011, of 13 December, approving the Inheritance and Gift Tax Regulations.

Other reductions:

– Reduction for the acquisition of goods and rights related to an economic activity

– Reductions for the acquisition of shares in entities

– Reduction for the acquisition rural properties dedicated to forestry

– Exemptions and reductions for the acquisition of agricultural holdings

– Reduction for the acquisition of cultural heritage assets

– Reduction for the acquisition of natural heritage assets

 – Decennial overtaxation reduction

Tax Rate

Rate applicable from 01.01.2010:

Multiplier coefficients applicable from 01.05.2020:

Bonification on the tax rate

Successions caused from 1 May 2020

For inheritances caused from 1 May 2020, the rebates are applied in accordance with the following rules:

Spouses may apply a 99% rebate of the inheritance tax liability on acquisitions due to death, including the amounts received by the beneficiaries of life insurance, which are accumulated in the rest of the assets and rights that make up their inheritance portion.

The rest of the taxpayers in groups I and II may apply the rebate in the weighted average percentage resulting from the application of the following percentages for each taxable base bracket:

a) For taxpayers in group I of kinship (except spouse):

b) For taxpayers in group II of kinship:

Donations

Reductions in the tax base

Reduction for donations for the first habitual residence of descendants

(also donation of property or donation of money to acquire it)

In donations to descendants (children, grandchildren, great-grandchildren, great-grandchildren or quadrigrandchildren) of a home that must constitute their first main residence or money intended for the acquisition of this first main residence, a reduction of 95% of the value of the home or the amount donated may be applied, with a maximum reduction of 60,000 euros, a limit set at 120,000 euros for donees who have a degree of disability equal to or greater than 65%. From 18.03.2023, the reduction also applies when the donation is of a piece of land or money to acquire it.

The maximum amounts of the reduction apply both in the case of a single donation and in the case of successive or simultaneous donations, which for this purpose are cumulative, whether they are exclusively monetary or if they combine a donation of a house or land and a donation of money, and whether they come from the same ascendant or from different ascendants. In the case of donations of money, the reduction may only be applied, within the aforementioned limits, to those made within the three months prior to the acquisition of the dwelling or land, from the date of the donation or, if there are successive ones, from the date of the first donation.

This reduction also applies when the donation is made in favour of the children of the spouse or stable partner and, from 01.01.2022 also to donations from foster people to the people fostered, provided that the foster care has been agreed in accordance with the provisions of Law 14/2010, of 27 May,  of rights and opportunities in childhood and adolescence.

Requirements

1. a) The donation must be formalised in a public deed, which must expressly state the purpose, in each case, of the donation:

• That the home will constitute the first habitual residence of the donee.
• That the land will be used for the construction of this first habitual residence.
• That the money received will be used to acquire the land or the first habitual residence of the donee. In the case of a monetary donation, the public deed must be executed within one month of the delivery of the money.

1. b) The donee may not be over 36 years of age, unless they have a degree of disability equal to or greater than 65%.
2. c) The sum of the general taxable bases and the savings of the last personal income tax return filed by the donee cannot be higher, subtracting the personal and family minimums, than 36,000 euros.
3. d) In the case of donations of money, the donee must acquire the property within three months from the date of the donation or, if they are successive, from the date of the first donation.

For the purposes of applying the reduction:

1. a) A primary residence is considered to be both the dwelling and a storage room and up to two parking spaces, which have been acquired simultaneously in a single act or are located in the same building or urban complex, and provided that, in both cases, at the time of transfer they are available to the donor, without having been transferred to third parties.
2. b) To consider that the home constitutes the taxpayer’s habitual residence, he or she must have lived in it effectively and permanently within 12 months from the date of acquisition of the home or completion of the construction works. In the latter case, the works must be completed within a period of three years from the donation.
3. c) A primary residence is considered to be the home in which the taxpayer resides for a continuous period of three years. It is understood that the dwelling also had this character when, despite the fact that the period of three years has not elapsed, there are circumstances that necessarily require the change of dwelling, such as the celebration of marriage, marital separation, the constitution of a stable partnership, termination of a stable partnership, job transfer, obtaining a first job or a more advantageous job or other similar circumstances.
4. d) If the dwelling has been effectively and permanently inhabited by the taxpayer within a period of 12 months, counted from the date of acquisition or completion of the works, the three-year period referred to in letter c is calculated from the latter date.
5. e) The acquisition of the first main residence is considered to be the acquisition in full ownership of the entire home or, in the case of spouses or future spouses, of an undivided part of the home.

Maintenance Rule

This reduction is understood to be granted on a provisional basis and is conditional on compliance with the temporary requirements established in letters b, c and d.

Loss of the tax benefit of the right to the reduction

In the event of non-compliance and loss of tax benefit, it is necessary to file a complementary self-assessment, this time without the reduction. The deadline for filing is one month from the day following the date on which the non-compliance or loss of the right to the tax benefit has occurred. The corresponding default interest must be included in the supplementary self-assessment.

Other reductions

– Reduction for donation of a business or professional business of the donor

– Reduction for donation of shares in entities

– Reduction for donation of money to set up or acquire a company or business or shares in entities, with registered office and tax address in Catalonia

– Reduction for donation of Spanish or Catalan historical heritage assets, by the spouse, stable partner, descendant or descendant

– Reduction for contributions to protected assets of taxpayers with disabilities

– Reduction for donations made by non-profit entities

– Reduction for donation of certain rustic farms dedicated to forestry

– Reduction for donations of agricultural holdings

Tax Rate

1.1. General rate

1.2. Groups I and II of kinship with a public deed or court decision

Source. https://atc.gencat.cat/es/tributs/isd/herencies