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INHERITANCE tax for estates of less than €1 million has been scrapped in Andalucía where the beneficiary is a spouse, parent or child.

The region has just approved its provisions for next year's budget, and the centre-right party Ciudadanos – governing the region in coalition with the socialists (PSOE) – put forward a motion to make life easier for bereaved family members.

In fact, Ciudadanos said it would not vote in favour of the 2018 budget unless inheritance tax abolished where the assets involved were worth less than €1m.

Although the party said inheritance tax was 'basically a thing of the past' in Andalucía, it still applies to beneficiaries who are more distant relatives than immediate next of kin, and the full whack is payable where there is no blood relation.

Inheritance tax has to be paid before the beneficiary is granted title to the assets, meaning they cannot sell a house inherited to settle the bill.

This often leads to people inheriting property from friends refusing them and handing them over to the State – and even, sometimes, family members.

But with this new ruling, 95% of beneficiaries in Andalucía will not have to pay inheritance tax, meaning a reduction in income for the region of €83m.

Article in Think Spain.

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