Most international families assume Spanish inheritance tax (Impuesto sobre Sucesiones y Donaciones, ISD) is a national tax with a national scale. It isn't. ISD is a regional tax, and the variance between regions is the single largest tax-arbitrage opportunity for HNW estate planning in Western Europe. A €15M generational transfer between parent and child can cost €5.5M in Cataluña, €3.2M in Asturias, and €55,000 in Andalucía — for the same family, the same assets, the same date of death. The 99% bonificación is the structural reason most UK, German, and US families with €5M+ Marbella exposure now register the recipient generation as Andalusian-resident before the transfer, not after.
ISD is regulated nationally by Ley 29/1987 of 18 December (Ley del Impuesto sobre Sucesiones y Donaciones) but ceded to the autonomous communities for rate-setting and bonificación. The national scale runs from 7.65% on the first €7,993 to 34% on amounts above €797,555, with multipliers (coeficientes multiplicadores) of up to 2.4 applied based on the recipient's pre-existing wealth and family relationship to the deceased. Heirs are grouped: Group I (descendants under 21), Group II (descendants 21+ and spouses), Group III (siblings, ascendants in second degree, in-laws), Group IV (cousins, unrelated). Andalucía applies a 99% bonificación on the cuota for Group I and II under Ley 5/2021, reducing the effective rate from 30%+ to roughly 0.3%-1% on most transfers. The bonificación is conditioned on the recipient being Andalusian-resident or the deceased having had Spanish residency or Spanish-situs assets — the residence test is the single most important compliance point.
Every ISD calculation runs through four sequential adjustments. Understanding the sequence is the difference between getting the bonificación right and accidentally paying the national scale on a region's worst-case interpretation.
Identify the assets passing to each individual heir. The taxable base for each heir is their share of the net estate (gross assets minus debts and deductible expenses), plus any pre-existing equalisation gifts (donaciones colationables) made in the prior 4 years.
Allowable deductions from the gross estate include:
Each heir applies a personal allowance based on their group:
Andalucía has expanded the Group I allowance under regional law to €1,000,000 per heir under specific circumstances (residence requirements, qualifying business asset transfers). The interplay with the 99% bonificación is examined in detail in our Andalucía 99% bonification article.
The cuota íntegra is calculated on the post-allowance base via the national scale (Ley 29/1987 art. 21):