Sofía, a nurse in Oviedo, gets a call from the notary: her aunt Pilar, single and childless, has named her heir to 150,000 €. The same month, her colleague Hugo learns that a childhood friend of his father's, who had no family, has left him another 150,000 €. The two compare figures with a third colleague who has just inherited the same amount from her mother. The three inheritances are identical in money. The taxes look nothing alike.
The four groups in article 20
The Spanish inheritance and gift tax (Impuesto sobre Sucesiones y Donaciones, ISD) classifies each heir according to their relationship to the deceased. Article 20.2.a) of Law 29/1987 sets up four groups, and the State rules give them these reductions in the base:
| Group | Who is in it | State reduction |
|---|---|---|
| I | Descendants and adopted children under 21 | 15,956.87 € plus 3,990.72 € for each year under 21, up to a maximum of 47,858.59 € |
| II | Descendants aged 21 or over, spouse, ascendants and adoptive parents | 15,956.87 € |
| III | Collateral relatives of the second and third degree (siblings, uncles and aunts, nephews and nieces) and ascendants and descendants by marriage (parents-in-law, stepchildren) | 7,993.46 € |
| IV | Collateral relatives of the fourth degree (cousins), more distant degrees and strangers | None |
Sofía is Pilar's niece: a third-degree collateral relative, group III. Hugo has no family relationship with the deceased: group IV. The third colleague, an adult daughter: group II.
The multiplier: what really drives up the bill
The reduction is only the first step. After the scale is applied, article 22 multiplies the gross tax by a coefficient that depends on the group and on the wealth the heir already had before inheriting (the pre-existing wealth, valued under the Spanish wealth tax rules):
| Pre-existing wealth | Groups I and II | Group III | Group IV |
|---|---|---|---|
| Up to 402,678.11 € | 1.0000 | 1.5882 | 2.0000 |
| From 402,678.11 € to 2,007,380.43 € | 1.0500 | 1.6676 | 2.1000 |
| From 2,007,380.43 € to 4,020,770.98 € | 1.1000 | 1.7471 | 2.2000 |
| Over 4,020,770.98 € | 1.2000 | 1.9059 | 2.4000 |
In other words: under the State rules, a stranger pays twice the tax a child pays on the same base, and has no reduction either.
The three calculations, step by step
We use the State scale in article 21 and the coefficients in article 22, with no regional benefits, and assume that none of the three has prior wealth above 402,678.11 €.
Daughter (group II)
- Taxable base: 150,000 €.
- Reduction: 15,956.87 €. Net taxable base: 134,043.13 €.
- Gross tax: 15,606.22 € + 18.7 % of 14,285.46 € = 18,277.60 €.
- Coefficient 1.0000. Tax: 18,277.60 €.
Sofía, niece (group III)
- Taxable base: 150,000 €.
- Reduction: 7,993.46 €. Net taxable base: 142,006.54 €.
- Gross tax: 15,606.22 € + 18.7 % of 22,248.87 € = 19,766.76 €.
- Coefficient 1.5882. Tax: 31,393.57 €.
Hugo, no family relationship (group IV)
- Taxable base and net taxable base: 150,000 €.
- Gross tax: 21,261.54 €.
- Coefficient 2.0000. Tax: 42,523.08 €.
If Hugo already had wealth of 600,000 €, the coefficient would become 2.1 and the tax 44,649.23 €. Article 22 itself corrects sharp jumps when wealth is just above the limit of a band, so that one extra euro of wealth does not push the tax up out of all proportion.
Between inheriting from a mother and from an aunt, on the State scale, Sofía's tax is 72 % higher than her colleague's. The difference does not come from the scale, which is the same, but from the smaller reduction and the coefficient. Many regions concentrate their reliefs on groups I and II, so the jump can be even larger in practice. The actual figure is calculated under the rules of the relevant region.
Relationships that cause doubts
- Cousins. They are fourth-degree collateral relatives: group IV, like a stranger.
- Siblings, uncles and aunts, and nephews and nieces by blood. Group III.
- Stepchildren and parents-in-law. They are descendants and ascendants by marriage: group III, not II, even if they were brought up as children or lived with the deceased.
- Brothers- and sisters-in-law, and the spouse's nephews and nieces. They are collateral relatives by marriage. Whether they fall into group III or IV has been disputed, and it should not be taken as settled without checking the administrative and court criteria in force at the date of death.
- Unmarried partner. The State law speaks of a spouse. Some regions treat registered partnerships as equivalent; others do not. Without that equivalence, the partner is a stranger for tax purposes.
What a distant heir can do
The kinship group is not chosen, but some decisions do influence the bill:
- Check which region applies. It depends on where the deceased lived in their last five years, not on where the heir lives. If the deceased lived outside Spain, the second additional provision of Law 29/1987 allows the regional rules to be applied. We explain it in which autonomous community applies.
- Review deductible charges and debts. The costs of the last illness, burial and funeral, and the deceased's proven debts, reduce the base.
- Value the assets properly. For property, the cadastral reference value is the starting point; see what value to put on the inherited house.
- Consider whether accepting is worthwhile. If the estate has more debts than assets, you can accept with the benefit of inventory or renounce. A pure renunciation sends the share to someone else called to inherit, and article 28.1 applies the renouncing heir's kinship if it is more burdensome; we deal with it in renouncing so that the children inherit.
- Do not forget cash. An inheritance of a property with a tax bill of 40,000 € can force a sale. There are deferral options, which we explain in what to do if there is no money to pay the tax.
If you are going to inherit from a distant relative or from someone with no family link, tell us the relationship, the deceased's residence and the assets in the inheritance form. We calculate the tax under the rules that apply and warn you of the variables that can move it; we do not promise a figure before seeing the documents.
And if the deceased knew in advance
When someone who wants to leave assets to a nephew or a friend plans it during their lifetime, there are tools that do not change the group but do change the timing or the form: life insurance with a named beneficiary (which has its own rules in the tax), staggered gifts that respect the aggregation periods in article 30, or leaving a usufruct instead of full ownership. None of them is a universal solution, and all are looked at under the rules of the deceased's region of residence.
Sofía paid her tax and kept the money. Hugo, with a tax bill more than double his colleague's, had to sell part of what he inherited to pay it.
We settle inheritances from distant relatives where the deceased or the heirs are outside Spain within Salama Tax for inheritance and gifts, with the same count of groups and coefficients.