Socio-affective bonds do not grant tax benefits in Inheritance Tax

The Directorate General of Taxes (DGT) has issued a relevant ruling regarding the application of tax reductions in Inheritance and Gift Tax (ISD) when an affective relationship exists but there is no legal kinship bond with the deceased.

What the DGT has ruled

The inquiry asked whether a person with a consolidated socio-affective bond with the deceased, comparable to a daughter de facto, could be integrated into Groups II or III of article 20.2 of the Law on Inheritance and Gift Tax (LISD) to benefit from reductions for direct family members. The DGT has responded negatively.

The ruling establishes that the Inheritance and Gift Tax regulations do not contemplate special kinship rules, so the Civil Code is applied supplementarily. Since the socio-affective bond does not confer any degree of legal kinship with the deceased, the person must be considered a stranger to the family, placed in Group IV. The administration maintains that the application of analogy to extend tax benefits beyond their strict terms is not admissible.

What this means for you

This pronouncement directly affects those individuals who receive an inheritance without possessing a legal kinship bond with the deceased, regardless of the intensity or consolidation of the existing affective relationship. In tax terms, the absence of a legal kinship tie implies that the heir will not be able to access the reductions provided for direct family members, which leads to a higher tax burden as they are classified in the group for strangers.

What you should do

In inheritance situations where no legal kinship bond exists, it is necessary to assess the structure of the transfer. It is recommended to analyze the legal situation of the beneficiaries and the applicable regulations to understand the real tax impact. Each case requires a specific technical assessment to determine the heir's exact tax position and the possible consequences of the transfer of assets.