The Inheritance and Gift Tax (ISD) is a direct, personal, subjective and progressive tax that taxes wealth increases obtained by natural persons through an inheritance or a gift.

In addition to inheritances and gifts, this tax also taxes the perception of amounts by beneficiaries of life insurance contracts, when the contractor (the one who pays) is a different person from the beneficiary (the one who receives), unless these amounts must be taxed as work income in the IRPF.

Inheritances

The obligation to pay the tax arises when a person dies and leaves goods or money to their successors. This option can only occur due to death and is free of charge.

Gifts

On the other hand, for gifts, the obligation arises when we receive a donation or gift that exceeds a certain amount. The donation must be made while the donor lives and is also free of charge (without consideration).

Applicable rates

The rates will vary depending on the amount received and the Autonomous Community where it is taxed, since many have established different rates, reductions, deductions and bonuses.

The scope of application is for the entire Spanish territory, but the Basque Country and Navarra have their own regulations on inheritances and gifts, as well as each Autonomous Community can regulate reductions of the taxable base, the tax rate, the amounts and coefficients of pre-existing assets, deductions and bonuses of the quota and aspects of management and liquidation.

We hope this information is very useful to you.