Is it better to make lifetime gifts or leave an inheritance in Catalonia?

Question

José Manuel Alburquerque · Accepted Answer

For a spouse and children, inheriting almost always works out cheaper, especially if a home is involved. Gifts do not benefit from the tax breaks available on inheritance. The donor may have to pay income tax on any gain on what they give and, if they die within the following four years, the gift can make the inheritance more expensive. Making a gift can pay off in specific cases, such as helping a young son or daughter to buy their first home, or with large sums. What you pay when you make a gift Between parents and children or between spouses, the tax ranges from 5 % to 9 % if a public deed is signed. If money is given, the deed must be signed within the month following the handover. Without a deed, the general scale applies, from 7 % to 32 %. If a flat or shares that have risen in value are given away, the donor pays income tax on that gain, unless they are over 65 and are giving away their principal residence. On inheritance, that gain is not taxed, although any gain arising when the heir sells is. If a property is given away, the “plusvalía municipal”, the municipal capital gains tax, is also payable, without the tax breaks that town councils may apply on inheritance. When making a gift can pay off Money for the first home of a child or grandchild aged up to 36, or the home itself. 95 % is tax-free, up to 60.000 euros. A public deed and an income of up to 36.000 euros are required. If the gift is money, there are six months to buy. Money for a child or grandchild to set up or buy a company or a business in Catalonia. 95 % is tax-free, up to 200.000 euros. Large sums. For a child receiving money, from around 550.000 euros upwards a gift usually attracts less tax than an inheritance. Before making a gift There is no going back on a gift, except in very specific cases. What is given in the ten years before death counts towards the forced share (“legítima”), the quarter of the estate reserved for the children. If there is not enough, the others can claim from the person who received the gift. In Catalonia there are also succession agreements and, since 14 July 2026, gifts mortis causa with delivery during the donor's lifetime, which are taxed like an inheritance. They need to be looked at case by case, also in view of the donor's income tax. The rules on the forced share and on succession agreements come from Catalan law. For gifts, the Catalan tax rules apply if the recipient has spent more days in Catalonia than in any other autonomous community in the last five years or, if a property is given, if it is located in Catalonia. For inheritances, what counts is where the deceased lived.