This article is part of our guide Inheritance in Spain with a non-resident, expat or foreigner.
In order to calculate Inheritance and Gift Tax, it is first necessary to know its characteristics, who is subject to it and the different groups into which it is classified.
Inheritance and Gift Tax is characterised as follows:
– Self-payable, according to the system established in some communities.
Who is subject to its liquidation?
There are three types of persons liable to pay ISD:
– Heirs, legatees and beneficiaries of inheritance titles.
– Donors or beneficiaries of any other legal transfer between living persons.
– Beneficiaries of life insurance policies.
Groups according to the degree of kinship
However, it is necessary to take into account the degree of kinship. For this purpose, the law establishes four groups for the settlement of the tax:
– Group 1: Beneficiaries under 21 years of age.
– Group 2: Beneficiaries over 21 years of age.
– Group 3: Second and third degree collaterals, and ascendants and descendants by affinity.
– Group 4: Fourth-degree collaterals and more distant relatives.
The relationship between the pre-existing wealth and the degree of kinship provides a multiplier coefficient that affects the inheritance tax liability to obtain the tax liability.
This parameter is important, since for example in some communities, those in group 1 only pay symbolic amounts and those in group 2 are practically free of taxation or have very important reductions.
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