- The Constitutional Court’s Plenary admits the dispute between constitutional bodies that the Government brings against the Senate.
- The issue is whether the Senate could process, against the Government’s view, a bill that would repeal the tax on inheritances and gifts.
- Admission does not decide the merits: the tax remains in force and the regional rules applying to an inheritance do not change.
The Official State Gazette of 27 April 2024 publishes the admission of dispute between constitutional bodies number 1219-2024, agreed by the Plenary of the Constitutional Court by order of 23 April. It is brought by the Government against the Senate, in relation to the decision of the Senate Bureau of 21 November 2023, ratified on 18 January 2024, which took into consideration a bill to repeal Law 29/1987 on Inheritance and Gift Tax, against the Government’s view.
The Government acted under article 134.6 of the Constitution, which requires its consent to process bills or amendments that increase appropriations or reduce budget revenue. It considers that repealing the tax would reduce revenue and that the Senate could not process the bill without its approval. Admission does not prejudge the decision on the merits, which is for the Plenary. The Court will have to decide whether the Senate overstepped by processing the initiative without that consent or whether, on the contrary, the Government extended the scope of the provision improperly.
What is at issue
The dispute is institutional rather than fiscal. It is about how much room Parliament, and specifically the Senate, has to process an initiative that reduces revenue, and what the Government’s role is as guarantor of budgetary coherence. The Court’s decision may set doctrine on when a bill needs the Executive’s consent. In short, it is a contest over how far the Government’s control reaches over parliamentary initiatives that affect the budget.
Inheritance and gift tax is a State tax ceded to the autonomous communities, which set reductions and allowances. That cession explains the large territorial differences and the political debate around it: some communities allow relief on practically the whole tax between close relatives, while others maintain a heavier burden.
What changes today for families
Nothing, for now. The tax remains in force, and the rules applying to an inheritance or a gift are those of the relevant autonomous community according to the connecting factors. The proceedings before the Constitutional Court do not repeal the tax or affect assessments in progress. Nor do they change filing deadlines or the allowances that each community applies.
What may happen is that the debate generates expectations. It is advisable not to take succession planning decisions based on a repeal that does not exist: neither delaying a gift nor bringing it forward on the strength of an announcement. Wealth decisions rest on the rules in force and on the family situation. Anyone planning to pass assets to heirs should decide on today’s rules, without taking for granted changes that depend on an open procedure.
What to review
Families with significant assets can review their succession planning with their adviser: wills, succession agreements, gifts made and planned, and the residence of the people involved, which determines which regional rules apply. In Catalonia, its own civil law and its succession agreements offer specific tools.
It is also useful to follow the proceedings, because the Court’s doctrine on article 134.6 could affect other initiatives to reduce taxes. Until there is a different rule, the prudent approach is to plan with the existing law. An adviser can help set out scenarios without betting on one political option or another.
Tax policy is debated in Parliament, but family planning is done with the law in force.
This article is general information. It is not legal, tax or investment advice, and it does not take anyone’s particular circumstances into account.
