Who regulates inheritance tax in the Basque Country
Thanks to the Economic Agreement, Inheritance and Gift Tax is an agreed tax that each historical territory regulates and collects separately. This means that the same inheritance may be taxed differently depending on whether the rules of Bizkaia, Gipuzkoa or Araba apply, and that the competent Provincial Council is determined by the habitual residence of the deceased.
Kinship groups
| Group | Relationship | General treatment |
|---|---|---|
| I and II | Spouse or civil partner, children, parents, ascendants and descendants in the direct line | High reliefs and very low rates |
| III | Collateral relatives (siblings, uncles and aunts, nieces and nephews) and relatives by marriage | Intermediate taxation, without the advantages of the direct line |
| IV | Cousins and distant or unrelated persons | Higher taxation |
Family business: the relief that saves the most
On the transfer of a family business, or of shareholdings that meet the requirements, foral legislation allows reliefs on the taxable base of up to 95%, which can bring the effective tax cost down from more than 30% to less than 5%.
It is one of the reasons why planning a succession well in advance makes such a large difference.
Lifetime gifts versus inheritance
Bringing the transfer forward by way of a gift makes it possible to use the reliefs and to plan the tax impact, but it has effects on the donor’s personal income tax (IRPF) and on the family’s assets. The decision between giving during your lifetime and transferring on death has to be analysed case by case, comparing foral Inheritance and Gift Tax, the capital gain and the family business regime.
Deadlines and filing
- Inheritances: the general deadline for settling the tax is 6 months from the date of death, and it can be extended.
- Gifts: they are settled within a shorter period from the date of the transaction.
- Where it is filed: with the Foral Tax Authority of the territory of the deceased or of the donor.
Plan your inheritance with Grupo Asegi
Our tax advisory and legal teams analyse each succession by combining foral legislation, family business relief and the structure of the family’s assets, so that the transfer pays no more than it should. We are in Bilbao, Vitoria-Gasteiz and Donostia, with knowledge of all three sets of foral rules.
Frequently asked questions
- Is inheriting from a parent or a spouse expensive in the Basque Country?
- In the direct line (groups I and II) the reliefs are very broad and the rates low, so the burden is usually small. The exact figure depends on the territory.
- Who collects inheritance tax in the Basque Country?
- The Provincial Council of the territory where the deceased was habitually resident: Bizkaia, Gipuzkoa or Araba.
- How much relief applies when inheriting a family business?
- Foral legislation allows reliefs of up to 95% of the taxable base where the requirements are met, which cuts the cost dramatically.
- What deadline do I have to settle an inheritance?
- As a general rule, 6 months from the date of death, with the possibility of an extension.
General information only; it does not replace professional advice. Foral legislation changes frequently — check the date it was last updated.