Inheritance Tax (Impuesto sobre Sucesiones y Donaciones)

Inheritance Tax (Impuesto sobre Sucesiones y Donaciones) - Guide.

Inheritance and gift tax (Impuesto sobre Sucesiones y Donaciones, ISD) is a state tax handed to the regions to manage, so Andalucía sets its own reductions. For close family the effective burden in Andalucía is now very low, but a return must still be filed.

The beneficiary groups

• Group I: children (natural or adopted) under 21.
• Group II: children 21 or over, spouses, parents and other ascendants.
• Group III: siblings, nieces and nephews, aunts and uncles, and relatives by marriage.
• Group IV: cousins and unrelated persons.

Andalucía reliefs for Groups I and II

Close family benefit from two major reliefs (Ley 5/2021 of ceded taxes):

• A reduction of 1,000,000 euros per heir off the taxable base.
• A 99% bonificación on whatever tax remains after that.

In practice most inheritances between spouses, and from parents to children, pay little or nothing. There are further reductions for the main home, disability, life insurance and family businesses. Even so, the inheritance tax return must be filed within six months of death (extendable once by another six months).

Groups III and IV

Siblings, nieces/nephews, cousins and unrelated heirs do not get the 99% bonificación. The regional scale (from 7% up to 26%) plus multiplier coefficients for kinship and pre-existing wealth apply, so the tax can be significant. Planning ahead matters most for these groups.

Lifetime gifts (donaciones)

A comparable 99% bonificación applies to gifts between Groups I and II, subject to conditions - typically the gift must be formalised in a public deed, and gifts of money must show the origin of the funds.