Tax on inheritance in Chile
The inheritance tax in Chile applies to the transfer of property due to death (and also to donations). It is regulated by Act No. 16.271 and administered by the Internal Tax Service (SII). The tax is levied on the net value of each hereditary assignment — that is, the amount each heir receives after deducting funeral expenses, succession costs (publication of the will, executor fees, court fees, etc.), hereditary debts, legally owed maintenance and the conjugal portion of the spouse. Only the portion that exceeds the applicable deductions and exemptions is taxable. If an heir receives several assignments in the same succession, those assignments are added to calculate the heir’s tax base.
The tax is progressive: rates range from 1% to 25% according to brackets defined in Annual Tax Units (UTA). The current official scale is:
| Inheritance (UTAs) | Rate |
|---|---|
| Up to 80 UTA | 1% |
| > 80 to 160 UTA | 2.5% |
| > 160 to 320 UTA | 5% |
| > 320 to 480 UTA | 7.5% |
| > 480 to 640 UTA | 10% |
| > 640 to 800 UTA | 15% |
| > 800 to 1200 UTA | 20% |
| More than 1200 UTA | 25% |
Family allowances
The law establishes tax exemptions according to the heir’s relationship to the deceased:
- Spouse, children and descendants (grandchildren, great-grandchildren, etc.) and ascendants (parents, grandparents, etc.): the first 50 UTA of each hereditary assignment are exempt. Since 2015, recognized civil coexistence grants the same rights: a recognized partner is treated as a spouse for this exemption.
- Collateral relatives in the second, third or fourth degree (siblings, half-siblings, nephews, uncles, second-degree cousins, etc.): the first 5 UTA of the assignment are exempt.
- Other heirs or those without kinship have no special exemption beyond the 5 UTA for collateral relatives (which typically does not apply when there is no legal kinship). For example, an unregistered partner or a friend will not receive the 50 UTA exemption and, except where the 5 UTA collateral exemption applies, the total inherited amount is taxable.
In short: direct heirs have a 50 UTA exemption per assignment; nearby collateral heirs have only 5 UTA. The tax base is calculated on the excess over these minima.
Surcharges by degree of kinship
After calculating the basic tax, the resulting amount is increased according to the heir’s degree of kinship (a surcharge applied to the basic tax):
- Direct heirs (spouse, children, parents): surcharge 0%.
- Collateral relatives in the 2nd to 4th degree (siblings, nephews, uncles, cousins): surcharge 20% on the basic tax.
- More distant relatives or non-related beneficiaries (friends, unrelated third parties): surcharge 40% on the basic tax.
Example: if the basic tax is 10 UTA, a sibling (2nd-degree collateral) would pay 12 UTA in total (10 + 20%), while a non-relative would pay 14 UTA (10 + 40%). These surcharges are established in article 2, paragraph 2, of Act No. 16.271.
Time limits for declaring and paying
By law, the declaration and payment of the tax must be made within two years from the date of death. For example, if the decedent died on 1 March 2024, the tax must be declared and paid before 1 March 2026. The SII provides online forms (Form 4412) for this declaration.
If the tax is not paid on time, the debt is updated according to the CPI and interest is applied (1.5% per month). Since the 2020 tax reform (Act No. 21.210) it is possible to defer payment in up to three annual installments, payable each 31 December at the taxpayer’s request. If an installment is not paid on time, heirs must cancel the outstanding amount before 30 March following the missed due date.
In practice, the initial step is to obtain effective possession before the Civil Registry (when the succession is administrative) or through the courts (when there is a contested will). Once heirs are identified, any of them can submit the declaration to the SII online. Note that direct heirs (spouse, children and other descendants, ascendants) are legally obliged to make the declaration when transmissible property exists.
Practical examples of calculation
To illustrate, assume 1 UTA is approximately CLP 800,000 (value in early 2025). Three typical cases:
- Low-value case (direct heir): A spouse receives a net allowance of 60 UTA. Of this, 50 UTA are exempt. Taxable amount = 10 UTA, taxed at 1% = 0.10 UTA (~CLP 80,000). No surcharge (direct spouse: 0%). Result: tax ≈ 0.10 UTA.
-
Medium case (nearby collateral): A brother inherits 300 net UTA. Apply 5 UTA exemption (2nd-degree collateral): taxable = 295 UTA. Progressive tax on 295 UTA (calculation):
- 80 UTA at 1% = 0.80 UTA
- 80 UTA at 2.5% = 2.00 UTA
- 135 UTA at 5% = 6.75 UTA
-
High-value case (non-relative): A beneficiary with no kinship inherits 1,500 UTA. There are no exemptions, so the entire amount is taxed. Progressive calculation:
- 80 UTA × 1% = 0.80 UTA
- 80 UTA × 2.5% = 2.00 UTA
- 160 UTA × 5% = 8.00 UTA
- 160 UTA × 7.5% = 12.00 UTA
- 160 UTA × 10% = 16.00 UTA
- 160 UTA × 15% = 24.00 UTA
- 400 UTA × 20% = 80.00 UTA
- 300 UTA × 25% = 75.00 UTA
These examples show how tax varies by amount and kinship: calculate the net assignment, subtract exemptions, apply the progressive scale and then the corresponding surcharge.
Tips and warnings
- Meet deadlines: declare and pay within two years to avoid fines and interest. Late payment is adjusted by the IPC and interest is added.
- Complete inventory: include all property and debts in effective possession. Omissions can result in tax assessments. Properly document funeral expenses, debts and maintenance allowances to deduct them.
- Correct valuation: declare realistic asset values supported by titles, expert appraisals and official certificates. The SII can review valuations (for example, non-commercial real estate) and adjust taxes if undervaluation is detected.
- Use applicable exemptions: direct heirs should claim the 50 UTA exemption. Do not assume every inheritance is taxable—modest inheritances can result in zero tax. Remember the 5 UTA exemption for 2nd–4th degree collateral relatives. Note that only registered spouses or recognized civil partners qualify for the 50 UTA; unregistered partners are treated as non-relatives and face the 40% surcharge.
- Separate assignments: each heir’s assignment is taxed individually. For example, if there are two children, each has a 50 UTA exemption and tax is calculated per heir. Do not divide the estate informally before applying exemptions; the law requires adding each heir’s assignments to determine the tax base.
- Seek professional advice: succession procedures (effective possession, wills, court processes) can be complex. Consult a notary or lawyer for legal steps and an accountant or tax advisor to optimize tax payment (for example, planning exemptions or requesting installment payments).
- Unmarried couples: if you plan to inherit between partners, consider legalizing civil coexistence or marriage to access the 50 UTA exemption and avoid the 40% surcharge applied to non-registered partners.
In summary, the inheritance tax in Chile is progressive and can be complex, but it provides significant exemptions for close relatives. Being informed about exempt amounts and surcharges helps avoid mistakes—such as failing to claim the 50 UTA exemption for children or spouses—and prevents unnecessary fines or overpayments. Consult Act No. 16.271, its regulations and SII guidance when preparing the declaration.
How can Produncan Lands help you with the inheritance tax?
Facing the death of a loved one is difficult, and the legal and tax procedures that follow can be burdensome. Produncan Lands offers comprehensive, clear and reliable support through the succession and tax process.
- We calculate the value of the hereditary estate and the applicable tax according to the brackets of Law No. 16.271.
- We identify exemptions, reductions and benefits applicable to heirs based on their degree of kinship.
- We assist with the timely declaration and payment to the Internal Tax Service, helping to avoid sanctions and interest.
Why choose Produncan Lands?
- Up-to-date knowledge of applicable legislation.
- Experience managing real estate and succession procedures.
- Close collaboration focused on clear and efficient solutions.
Produncan Lands aims to make this complex and emotionally demanding process secure and transparent, so heirs can focus on honoring their loved ones and planning for the future.