Inheritance Tax in Seville: Andalusia's 99% relief for direct-line heirs

Inheritance Tax in Seville and Andalusia: the 99% relief

Andalusia has applied the same 99% relief as Madrid for direct-line heirs on the Impuesto sobre Sucesiones y Donaciones since 2022, capped at one million euros of liquidable base per heir. This measure, approved by Decreto-Ley 7/2021 of the Junta de Andalucía and subsequently confirmed by statute, places Seville among the cities where inheritance between parents and children carries the lowest tax cost in Spain.

The 99% relief applies to Groups I and II of the ISD: descendants (including adopted children) of any age, spouse or registered partner, and ascendants. For these heirs, the effective ISD burden is practically negligible in the vast majority of ordinarily sized estates. Only for inheritances of very large assets (above one million euros per heir) does the ISD start to carry a significant cost in Andalusia.

However, the relief does not apply automatically. To benefit from it, the self-assessment must be filed correctly before the Agencia Tributaria Andaluza (ATRIAN) within the deadline, the kinship must be evidenced, and all assets in the inventory must be documented. An error in the return or the omission of assets can lead to reviews and supplementary assessments with surcharges and interest.

Seville’s estate context: family businesses, agricultural estates, and the agri-food sector

Seville and its surrounding area have a distinctive economic fabric: a significant concentration of family businesses in construction and real estate development, hospitality, agri-food (olive oil, cereals, wine), logistics, and retail. Also notable is the presence of agricultural estates and farming operations in the Vega del Guadalquivir, the Bajo Guadalquivir, and the Sierra Norte, whose generational transfer has specific tax implications.

For the inheritance of Seville family businesses, the 95% reduction under article 20.6 LISD combined with the Andalusian 99% relief can make the transfer carry a near-zero tax cost. At BMC we analyse in each case whether the business assets meet the requirements for the reduction and plan, where possible, the optimal structure.

For agricultural estates, the tax treatment depends on whether the asset is considered an active farming operation (an asset engaged in an economic activity) or mere land holding (an asset not engaged in an economic activity). The distinction is determinative for the application of the 95% reduction. BMC analyses the correct classification of each estate and prepares the documentation required to evidence genuine farming activity.

The procedure before the Agencia Tributaria Andaluza (ATRIAN)

The ATRIAN is the regional body that manages the ISD in Andalusia. The self-assessment is filed using the ISD model made available on the ATRIAN’s electronic portal. The deadline is six months from the date of death, extendable by a further six months if requested before the fifth month.

The ATRIAN office in Seville is located in the city centre. Filing can be done in person or electronically through the ATRIAN portal. BMC manages electronic filing for all its Seville clients, removing the need to attend the agency’s offices.

Where the self-assessment includes the family business reduction or property valuations that may be challenged by the tax authority, BMC prepares a technical documentation dossier accompanying the return, reducing the risk of reviews and provisional assessments.

Inheritances involving real estate in Seville: the reference cadastral value and the market

Since Ley 11/2021, real estate must be valued in the ISD using the reference cadastral value as the minimum taxable base. In Seville city, reference cadastral values are relatively up to date for most districts, although discrepancies can exist between the reference value and the actual market value, particularly in areas with a volatile property market or for properties with unusual characteristics.

For real estate in the Aljarafe area of Seville (municipalities such as Bormujos, Tomares, Gines, Camas, or Espartinas), reference values may differ significantly from the local market. BMC analyses in each inheritance whether challenging the reference cadastral value is appropriate and handles the corresponding procedure before the Catastro and the ATRIAN.

For inherited real estate with significant latent gains (typical in the case of dwellings acquired before the year 2000 in the historic centre of Seville or in the Aljarafe), BMC also analyses the IRPF implications on a subsequent sale: the acquisition value for IRPF purposes is the value at which the property was declared in the ISD return, which can generate relevant capital gains if the declared value was low.

Preventive planning: gifts and lifetime transfers

The 99% relief also applies to inter vivos gifts in Andalusia between direct-line heirs (since 2022), though with different conditions depending on the type of asset and the kinship. For families wishing to transfer assets during their lifetime, gifts can be an alternative or complement to inheritance.

However, a lifetime gift has IRPF implications for the donor (the gift can generate a capital gain taxable under the donor’s IRPF) that must be analysed. BMC carries out a combined ISD and IRPF analysis to determine whether a lifetime transfer (gift) or a transfer on death (inheritance) is fiscally more efficient in each specific case.

For business assets, gradual succession, transferring a partial stake during the owner’s lifetime while retaining the majority until death, can be a valid strategy to make full use of the available reliefs and reductions on the best possible terms. BMC draws up generational transfer plans for Seville family businesses with a 5-15 year horizon.

Inheritances for non-residents with assets in Seville

Non-residents in Spain who inherit assets located in Seville or Andalusia are also subject to Spanish ISD by real obligation. Following the Supreme Court judgment of 2023 (which developed the CJEU case law in Arens-Sikken), non-residents may apply the rules of the autonomous community where the assets are situated (Andalusia), which in practice allows them to claim the 99% relief on the same terms as a resident.

For non-resident heirs with assets in Seville, the ISD settlement procedure is managed through the ATRIAN (no longer through the Special State Tax Delegation as was previously the case). BMC manages the ISD for non-resident heirs with assets in Andalusia, including obtaining the NIE for foreign heirs who do not already have one.

BMC in Seville: specialist tax advisory for inheritances and family businesses

BMC has a presence in Seville and throughout Andalusia, with a team specialising in the Andalusian ISD, the transfer of family businesses, and tax planning for families with significant estates. Our team includes specialists in the agri-food sector, construction, and real estate, the areas where we handle the most complex inheritances in Seville.

In addition to the ISD, BMC manages the IRPF of heirs in subsequent tax years (with the correct determination of the acquisition value of inherited assets), the Impuesto sobre el Patrimonio, and the tax implications of the subsequent management of the inherited estate. The initial consultation is free and without obligation.

BMC has representation in Seville. Visit our Seville office for a personalised meeting.