Constitutional Court to decide future of Inheritance Tax

The Plenary Session of the Constitutional Court (TC) has included a last-minute entry in its agenda for today, to study whether or not to admit for processing the Government’s appeal against the Proposal of Law by which the Inheritance and Donation Tax is repealed, as requested and promoted by the PP.

The Executive argues that this proposal to appeal the tax goes against article 136.6 of the Constitution, which stipulates that ” any proposal or amendment that involves an increase in credits or a decrease in budget income will require the consent of the Government for its processing.”

Last December, the PP announced this proposal to eliminate the Inheritance and Donation Tax in all the Autonomous Communities of the country. Many of the regions have it discounted between 99% and 100%. However, it is still especially burdensome in four Autonomous Communities: Castilla-La Mancha, Navarra, Asturias, and Catalonia.

The total elimination of the Inheritance Tax will force the State to compensate them for the money they fail to collect, as indicated in the appealed Savings Law Proposal. This tax, according to data from the central Executive, annually injects 2.8 billion euro into public coffers.

The text of the proposal indicates that one of the reasons for repealing this tax is to prevent a person from having to reject an inheritance because they cannot bear the taxes that come with receiving the assets. “The State cannot be insensitive to the problem that most families have to consider whether or not to accept an inheritance because they do not have money to pay the tax, and that in some places it can be confiscatory,” they explain.

On the other hand, the proposal states that eliminating this tax does not represent an unbearable damage to the total collection because it only represents 1%.