How can you pay less tax on an inheritance in Catalonia?

Question

José Manuel Alburquerque · Accepted Answer

Through the tax breaks provided for by the law itself. The main ones are the 95 % allowance for the deceased's principal residence, the one for the family company or business and the one for life insurance. Lifetime gifts too, in the cases where they pay off. A well-thought-out will helps to make the most of them. What is not advisable is hiding assets or declaring them below their value, because the “Agència Tributària de Catalunya”, the Catalan tax authority, checks this and collects the difference with interest and penalties. The tax breaks in the law The deceased's principal residence. 95 % of its value is deducted, with a limit of 500.000 euros for all the heirs together. It applies to the spouse or stable partner (in a “pareja estable”, the Catalan stable partnership), children, grandchildren, parents and grandparents. Also to a sibling, nephew, niece or other collateral relative over 65 who had lived with the deceased for the last two years. It must be kept for five years. Family company, business or quotas (“participaciones”). 95 % is deducted if certain requirements are met and they are kept for five years. Anyone who applies this allowance loses the tax credit, so both calculations need to be done. Life insurance. The spouse, the stable partner, children, grandchildren, parents and grandparents pay nothing on the first 25.000 euros. Disability of 33 % or more. A further 275.000 euros is deducted, or 650.000 if it reaches 65 %. Age. Anyone aged 75 or over who inherits from their spouse, a child or their parents deducts a further 275.000 euros, unless they already deduct for disability. What can be planned How the will divides the estate. For example, leaving the home to someone who can apply its allowance. Lifetime gifts. Between parents and children the tax is 5 % to 9 % with a public deed. Help towards the first home of a child aged up to 36, or for them to set up a company, has its own tax breaks. For the spouse and children, inheriting almost always works out cheaper, except with large sums. Succession agreements and, since 14 July 2026, gifts mortis causa with delivery during the donor's lifetime. They are normally taxed like an inheritance, with its allowances and tax credits, although it depends on how they are made and they should be looked at case by case. What does not work Renouncing in favour of someone else. The tax authorities treat it as if the inheritance had been accepted and then given away. Tax is paid twice. Withdrawing money from the accounts shortly before the death. What the deceased had in the year before death is presumed to still be part of the estate, unless it is proved that the deceased personally gave it away or paid it to someone who does not inherit and is not a relative up to uncles, aunts, nephews and nieces. Declaring flats below their “valor de referencia”, the reference value set by the Spanish land survey office, the “Catastro”. The Catalan tax authority takes that value as the minimum.