2023-07-20 04:15:00
The regional governments of the Balearic Islands, the Valencian Community and the Canary Islands will practically eliminate the Inheritance tax on inheritances received by descendants, ascendants and spouses. With this suppression, only five autonomous communities will maintain the tax and among them is Asturias, which also has the highest maximum rates.
Tax competition between communities has rebounded after the 28M elections. Changes in government have led to reversals in the tax policies of various autonomies. The Government of the PP of the Balearic Islands approved on Tuesday a decree law that repeals the Inheritance and Donations tax between descendants, ascendants and spouses and reduces it by up to 50% in the case of uncles and nephews. The measure will have to be validated by parliament within a month. In the Canary Islands, the Executive of the PP and Canary Coalition announced after holding its first Governing Council a 99% discount on Inheritance and Donation taxes, and in the Valencian Community the Executive of PP and Vox has also included among its first measures the elimination of what they have called the “death tax” in reference to the Inheritance tax.
The Balearic Islands, the Canary Islands and the Valencian Community will be added to the Community of Madrid, Cantabria, Navarra, Andalusia, Extremadura, the Region of Murcia and the Basque foral territories, in which the heirs are practically exempt from taxation when they are descendants, ascendants or spouses. Galicia can also be included in this list, where a reduction of one million euros is applied.
In the Inheritance tax map there are only five communities in which it can be said that the tribute is maintained. They are Catalonia, Aragon, Castilla-La Mancha, La Rioja and Asturias.
In the Principality, the Inheritance Tax has not been modified since 2017, a year in which, in addition to raising the exempt minimum (first from 150,000 to 200,000 euros and then up to 300,000 euros, a ceiling that most inheritances do not exceed), reductions were introduced to promote the continuity and creation of companies and agricultural holdings. Despite this downward regulation, the collection obtained by the Principality in this tax ceded by the State is already higher than that registered before the reforms. In 2022 the collection was 107.48 million euros, indicates the provisional income statistics of the Public Entity of Tax Services of the Principality of Asturias.
According to a comparative study prepared by the Registry of Tax Advisory Economists (REAF) of the General Council of Economists of Spain, a 30-year-old person who inherits assets from his father worth 800,000 euros, of which 200,000 correspond to the deceased’s home, will pay 103,135 euros of inheritance tax this year in Asturias, the highest rate among the autonomous communities. If that same person inherited in the neighboring communities of Cantabria and Galicia, he would not pay anything. And if he did it in Castilla y León, he would pay 810 euros.
The REAF study highlights that in Galicia, in addition to the reduction of one million euros, rates from 5 to 18% are applied, while in Asturias the range is from 21.25 to 36.50%. The maximum even exceeds the state level of 34% and is the highest among the autonomous communities under the common regime.
In other regions that, such as Asturias, the Inheritance tax has not been abolished, the tax base ceilings that leave almost no taxation exceed the 300,000 euros of the exempt minimum in Asturias. In La Rioja they are 400,000 euros and in Aragon 500,000.
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