Inheritance tax and law

July 11, 2018

INHERITANCE TAX (Impuesto a las Herencias, Asignaciones y Donaciones)

Inheritance, gifts and donations taxes are payable by the heirs and beneficiaries. The tax rates vary according to the degree of relationship and the value of the inheritance.

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

The tax base 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 ATU for tax year 2018 is CLP572,172 (US$867). The ATU for tax year 2017 is CLP563,664 (US$854). The ATU for tax year 2016 is CLP554,196 (US$840).


INHERITANCE TAX

TAX RATE ON DIFFERENT CATEGORIES
TAX BASE, ATUS
I
II
III
Up to 80 ATU
1%
1.2%
1.4%
80 ATU - 160 ATU
2.5%
3%
3.5%
160 ATU - 320 ATU
5%
6%
7%
320 ATU - 480 ATU
7.5%
9%
10%
480 ATU - 640 ATU
10%
12%
14%
640 ATU - 800 ATU
15%
18%
21%
800 ATU - 1,200 ATU
20%
24%
28%
Over 1,200 ATU
25%
30%
35%
Source: Global Property Guide

Category I heirs (spouses, legitimate ancestors, natural or adoptive parents, legitimate children and legitimate descendants) are entitled to an exemption of 50 tax units. In case of Category II heirs (siblings, half-siblings, and other relatives up to the fourth degree), the tax-exempt amount is fixed at 5 tax units. Category III heirs (any other person) do not receive any tax exemption.

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