El Inheritance tax It is one of the “oldest” taxes that exist in Spain and in the world. The origin of this Tax is found in the old “Tax on real rights” in force since the end of the XNUMXth century. Basically it taxed the transfer during life or by cause of death of real estate, or immovable property, hence the word “real”. 

Today, this Tax taxes acquisitions due to death, donations and acquisitions derived from insurance on people's lives. These acquisitions determine the “taxable events” of the Tax. 

The Tax is very complex, as it has a general regulation for all of Spain and a regional regulation. In the latter, it is the one that can set the bonuses and tax rates. Regional regulation is what matters in the vast majority of cases. The complexity is determined by the fact that in Spain there are 17 autonomies and this means that there are 17 different regulations. Look at competency delimitation chart. 

One of the matters with general regulation is the determination of the taxable person. The LISyD distinguishes four kinship groups:

  • Group 1: all those descendants and adoptees under 21 years of age.
  • Group 2: descendants and adoptees over 21 years of age, spouses, ascendants and adopters.
  • Group 3: brothers, uncles and nephews.
  • Group 4: cousins ​​and other more distant degrees of kinship.

Criterion: the larger the group, the greater the tax burden. 

Within the inheritance tax regulations at the autonomous level we can distinguish three groups or three different ways of regulating the tax by the autonomy: 

A first group is made up of those autonomies, in which the tax regulation is very similar to the general regulation. 

A second group is made up of those autonomies, in which regional regulation is very beneficial for the taxpayer, and the Inheritance Tax has been reduced or eliminated among certain people. For example, there are bonuses in favor of the spouse or descendants (groups 1 and 2). 

A third group is made up of those autonomies, where regional regulation is more harmful than general regulation. 

You can see an example of taxation based on the CCAA here. 

Therefore, dying in one Community or another comes at a different price. For example, if you die in Asturias, prepare your pocketbook because your death will be expensive. On the other hand, if you die in Madrid, you have been lucky and your death will be cheap. 

In short, the Inheritance Tax is a tax that:

  • The amount to pay can be important and this is greatly influenced by the CCAA where you live. 
  • It is a Tax that only natural persons pay, not legal entities.
  • Within relatives, those who are closest pay less and those who are most distant pay more. In many autonomous regions, spouses and descendants do not pay or pay very little.
  • It is a progressive tax: the more you inherit, the more you pay.
  • It is a tax where the assets of the heir or legatee acquiring the succession can influence making the tax rate even more progressive. In other words, if you inherit and are rich you will pay even more.