Castilla La Mancha

Inheritance tax Castilla La Mancha

Castilla La Mancha has its own inheritance tax regulations as a result of the Spanish State ceding the tax revenue of inheritance and gift tax to Comunidades Autónomas, along with some regulatory autonomy to adapt tax to the particular circumstances of the respective Comunidad Autónoma.

This means that most Comunidades Autónomas have ruled new (and huge) benefits compared to those established by the Spanish State.

While the tax scheme and regime is the same in all parts of Spain, the Comunidades Autónomas took advantage of the given power to fix higher thresholds, or different rates or direct reductions on the amount to be paid (and sometimes all of these) to benefit close relatives of the deceased or disabled people. There are also benefits that help promote local business, farming, etc. as well as in the acquisition of the Comunidad Autónomas’ cultural assets.

However, the Comunidades Autónomas change their regulations quite frequently so it is necessary to check the regulation in force at the time the tax is due (the day of death).

In Castilla la Mancha there are larger benefits for life insurance, kin and disabled people.

There are extra advantages for acquisitions by disabled people ( Up to 125.000 € for a disability grade of 33% or over and up to 225.000 € for a disability grade of 65% or over)

There is a deduction of up to 95% of the tax to be paid by a spouse, ascendants, descendants, and also for disabled people with a grade of disability of 65% or over.

These deductions have been on a variable rate depending on the value of the acquired assets, once the reductions have been applied ( Base Liquidable). All of them are in the calculator. Please ask if you have any difficulties using the calculator.

In Castilla La Mancha there are peculiarities related to the reduction of value of the house which has been the habitual residence of the deceased and in the acquisition of an individual enterprise, professional business or share in a company.

Also, from 1-1-2020 there is a new reduction that affects the value of assets included in the «Patrimonio Cultural» de Castilla la Mancha, if those assets are freely loaned for use by Public entities or Universities of Castilla la Mancha , the reduction being a percentage of the value of the assets according to the period of time of the grant ( up to 100% for a permanent loan)

The question now is who can take advantage of these benefits:

If the deceased was a resident in Spain, the inheritance tax law of Castilla la Mancha is applicable if the deceased lived there for most of the five years immediately prior to death.

If the deceased had lived longer in another Comunidad Autónoma than that in which they had their last residence, within this last five year period, that Comunidad Autónoma’s rule will be applied.

If the deceased was a resident in Spain, but for less than five years at the time of death, no Comunidades Autonomas Law will be applicable, BUT Spanish State Law will be applied.

If the deceased was a non-resident in Spain, BUT the beneficiary is, the tax payer can choose to apply the rule of the Comunidad Autónoma where the most valuable assets are located and, if there are no assets in Spain, the Law of the Comunidad Autónoma where they live.

In cases where both the beneficiary and the deceased were non-residents, the tax payer can choose the law of the Comunidad Autónoma where the most valuable assets are located.

These options for non-residents, are the result of a long process that has evolved in Spanish Law since the European Court of Justice resolution of September 2014.