Chile: Inheritance
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Inheritance tax and law
INHERITANCE TAX
Inheritance, gifts and donations taxes (Impuesto a las Herencias, Asignaciones y Donaciones) are payable by the heirs and beneficiaries. The tax rates vary according to the degree of relationship and the value of the inheritance.
The taxable inheritance is the net value of each heir’s inheritance Annual Taxable Units (ATU) are used as the basis for valuation. Taxable Units are adjusted monthly according to the variation of the cost-of-living index. The Annual Taxable Unit (ATU) for tax year 2006 is CLP386,472 (US$853).
The inheritance tax rates for different categories of heirs are as follows:
INHERITANCE TAX |
|||
| TAX RATE ON DIFFERENT CATEGORIES | |||
| INHERITANCE VALUE (ATuS) | I | II | III |
| Up to 80 | 1% | 1.2% | 1.4% |
| 80 - 160 | 2.5% | 3% | 3.5% |
| 160 - 320 | 5% | 6% | 7% |
| 320 - 480 | 7.5% | 9% | 10% |
| 480 - 640 | 10% | 12% | 14% |
| 640 - 800 | 15% | 18% | 21% |
| 800 - 1,200 | 20% | 24% | 28% |
| Over 1,200 | 25% | 30% | 35% |
| Source: Global Property Guide | |||
Heirs and beneficiaries are classified into the following categories:
- Category I: spouse, direct descendants, direct ascendants, adoptive descendants, adoptive ascendants
- Category II: siblings, nephews and nieces, aunts and uncles, first cousins
- Category III: any other person
When an inventory is made, all assets located abroad are included. This rule does not apply to foreigners, unless the assets abroad were acquired with domestic-sourced income. Estate taxes paid abroad on such assets are credited against the total amount of Chilean inheritance and gift taxes. Estates pass either through will, or by operation of law. Property escheats to the State upon intestacy and lack of heirs.
Spouses, legitimate ancestors, natural or adoptive parents, legitimate children and legitimate descendants can receive 50 Annual Taxable units (ATU) tax-exempt. In case of siblings, half-siblings, and other relatives up to the fourth degree, the tax-exempt amount is fixed at 5 ATU, and a 20% surcharge is applied. Non-related parties do not receive any tax exemption and pay a 40% surcharge.
In addition, DFL-2 properties are exempted from this tax.
Chile - more data and information
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