Understanding the enhanced allowances you are entitled to is the first step to reducing your Spanish inheritance tax liability when inheriting an estate located in Cataluña. The information provided below has been updated and is valid for 2024. However, before relying on this information, it is strongly recommended to contact an expert in probate in Cataluña.
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1. Inheritance Law in Cataluña
In 2001 the Spanish government devolved the power to set inheritance tax rates and deductions to the regional parliaments. Most regions enacted tax laws that applied generous deductions only to those beneficiaries who were resident in the region over the balance of the previous five years.
On September 3rd 2014, the European Court of Justice ruled that such laws were discriminatory and contrary to European Law. Accordingly, the Spanish government has enacted new legislation (Ley 26/2014) which makes any deductions that may be applied to residents also available to non-residents who are EU citizens.
2. Tax Exemptions and Deductions in Cataluña
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.
3. Personal Deductions - What are Groups?
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
4. Personal Deductions by Group
The following are the additional deductions available in Cataluña:
- 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
Note, when we speak of deductions, we mean that the amount you would be taxed on is deducted by a set percentage before applying the rate of tax. So, if you have inherited €100,000 and are entitled to a deduction of 95%, this means you will pay tax at whatever rate is appropriate to you - on €5,000 only.
On the other hand, when we speak of discounts, this is applied to the amount of tax you have to pay. So, if after applying any deductions you have to pay €1000 in inheritance tax, and you are entitled to a discount of 99%, this would mean you would only have to pay €10.
5. Inheritance Tax Rates in Cataluña
| Base up to € | Base Tax € | Remaining Base up to € | Marginal Rate % |
| 0.00 | 0.00 | 50,000.00 | 7 |
| 50,000.00 | 3,500.00 | 150,000.00 | 11 |
| 150,000.00 | 14,500.00 | 400,000.00 | 17 |
| 400,000.00 | 57,000.00 | 800,000.00 | 24 |
| 800,000.00 | 153,000.00 | and above | 32 |
So, as an example, an inheritance of €100,000 (after all other deductions applied) would attract inheritance tax of €3,500 (tax applicable up to €50,000) + the remaining €50,000 @ 11% = €9,000.
6. Existing Wealth Multipliers
In Spain, inheritance tax accrues to the individual beneficiary, and as a result, in order to calculate the inheritance tax payable, it is necessary to take into account both the existing personal wealth of the beneficiary and the group of beneficiaries (as defined above) that they belong to, as follows.
| Pre-existing Wealth € | Groups I & II | Group III | Group IV |
| 0 to 500,000.00 | 1.0000 | 1.5882 | 2.0000 |
| 500,000.01 to 2,000,000.00 | 1.1000 | 1.5882 | 2.0000 |
| 2,000,000.01 to 4,000,000.00 | 1.1500 | 1.5882 | 2.0000 |
| More than 4,000,000.00 | 1.2000 | 1.5882 | 2.0000 |
To take the previous example of an inheritance of €100,000, if the beneficiary is the sibling of the deceased, with existing wealth (including all assets) of €1,000,000, then as a sibling they would be in Group 3 and with an existing wealth as stated, a multiplier of 1.5882 would be applied to the inheritance tax payable i.e. €9,000 x 1.5882 = €14,293.80.
7. Beneficiaries 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.
8. Deductions for the Disabled
In addition to any personal deductions that may be applicable, a beneficiary with a disability may add an additional €275,000 deduction if the disability is determined to be of a magnitude of 33% and €650,000 where the disability is assessed at 65%.
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9. 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. Elderly relatives living with the deceased for a period of 2 years or more may likewise benefit.
The €500,000 exemption to be shared among the beneficiaries according to their inheritance, with a minimum deduction of €180,000 for each beneficiary.
The property may not be sold for a period of 5 years if the exemption is taken advantage of. Included in the definition of family home are any storage room (trastero) and up to 2 x parking spaces.
10. 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, among other requirements.
11. 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.
12. Special Deductions - Spouses
After applying the aforementioned deductions, a discount of 99% shall be applied to any tax payable by a spouse including any payable under life insurance payout.
13. Special Deductions - Forest Land
Cataluña's inheritance tax law has introduced several environmentally and socially focused deductions, reflecting growing concerns about forest preservation and sustainable agriculture.
The inheritance of Forested land will attract a 95% deduction under the proviso that the beneficiary maintains ownership for at least 10 years following the inheritance.
The land must also meet the following criteria:
- Have approved forest management plan
- Be managed under formal agreement with forestry administration
- Located in areas affected by forest fires in last 25 years
14. Special Deductions - Charitable Donations
The new inheritance tax rules this year also seek to align with broader European Union environmental and social policies while protecting traditional Catalan land management practices.
Accordingly, qualifying charitable organisations that receive a bequest from a testator may apply a deduction of 95%, with the following provisos:
- Foundation must be registered for minimum 2 years
- Must be documented and made via bank transfer
- Must align with foundation's objectives
15. Special Deductions - Protected Assets
The concept of protected assets is part of a broader framework of protection instruments in Book Two of the Catalan Civil Code. For our purposes here, it is sufficient to summarise that the objective is to permit family members to provide financially for disabled family members, and that any such provisions - properly constituted (via notary) - attract a deduction of 99%.
This special deduction applies to both inheritances and gifts.
There are some important exclusions and exceptions, for example, any creditor of the testator or donor of a gift will take precedence over the beneficiary or donee should the debt predate the gift or bequest. The inheritance of legitimate heirs may also not be prejudiced.
16. Inheritance of Foreign Assets by Tax Residents of Cataluña
In the case of foreign nationals who are tax resident in Cataluña, there is an obligation to comply with inheritance tax obligations in Spain, when assets abroad are inherited.
It is important to ensure that the deductions available to all tax residents in Cataluña are applied instead of the State level rules. This can make a huge difference when inheriting the family home of a deceased parent abroad.
Also worth noting is that if the assets are located in Sweden, France and Greece are subject to the Double Taxation Treaties signed between Spain and these countries, and which regulates the rules for inheritance.
Should you inherit assets located abroad, you will also need to ensure that, following the transfer of ownership of those assets, you make the appropriate Spanish tax return using form 720.
17. Processing an inheritance in Cataluña
Practically, a beneficiary will need to take some or all of the following steps in order to process an inheritance. Given the complexity and potential taxes and fines if not processed correctly, it is highly advisable to contact a specialist in probate law for assistance:
- Obtain the Death Certificate
- Secure the Certificate of Last Wills
- Locate the Will
- Gather Necessary Documentation
- Obtain the NIE Number for Heirs
- Assess Applicable Inheritance Law
- Prepare the Inheritance Deed
- Pay Inheritance Taxes
- Settle the Plusvalía Tax
- Register the Asset Transfer
18. Gift Tax Comparison
The possibility of ‘gifting’ an interest in property in advance of - and instead of - the assets passing through inheritance is often considered, especially by those with family heirs resident in Cataluña. The relative benefits of choosing this option can vary greatly, and it is a complex area.
Firstly, it should be taken into consideration that gifts in Cataluña are also subject to tax, as follows:
| Base up to € | Base Tax € | Remaining Base up to € | Marginal Rate % |
| 0 | 0 | 200,000 | 5 |
| 200,000 | 10,000 | 600,000 | 7 |
| 600,000 | 38,000 | remainder | 9 |
This tax is payable within 30 days of the date of the gift.
Any gifts of property in Cataluña would also be subject to the Plus Valía tax, such that any increase in the value of the property since the date of purchase would be taxable at the local rate. The actual rate must be calculated based on the location of the property, applying the local coefficient to the catastral value of the property and then the local rate, which in Barcelona, is 30%. Once again, this tax must be paid at the time of the gift.
