Proposed changes in Spanish Inheritance and Gift tax


29 Apr. 2014

The report submitted last Mach 14 by the Committee of Experts to the Spanish Government included 4 proposals aimed to harmonize taxation on Inheritance and Gift tax across the Country:

  1. To establish a minimum level of State taxation (at present, close relatives have almost free inheritance and gift taxation in the region of Madrid).

  1. To reduce and simplify the tax scale based only on the degree of kinship and not on the value of the assets:

  • Reduced tax rate of 4% or 5% for children, adopted children, grandchildren, spouses, parents and grandparents.
  • Standard tax rate of 7% or 8% for cousins, nieces, nephews and more distant relatives.
  • Higher tax rate of 10% or 11% for all other heirs including unmarried partners.

  1. To establish a national threshold between 20.000 € and 25.000 €.

  1. To eliminate the reductions for kinship or acquisition of main home among others as it is not necessary due to the new tax scale, but keeping those for disability and acquisition of family business, amongst others.

The Government will take those proposals as recommendations for the tax reform expected to be announced soon, to become in force as of 2015.

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