Temporary 50% reduction in gift tax: the one year window that Chile's National Reconstruction Law will open.

The bill for National Reconstruction and Economic and Social Development (Bulletin No. 18,216-05), already approved by the National Congress, provides for a 50% reduction in the gift tax governed by Law No. 16,271. The reduction applies once to gifts received from the donor by forced heirs (legitimarios) and by beneficiaries of the cuarta de mejoras, provided the gift is granted by public deed within one year from the date the rule enters into force, that is, from the first day of the second month following its publication.

General context

On 4 August 2026, through Official Letter No. 21,440, the Chamber of Deputies informed the President of the Republic that the National Congress had approved the bill establishing measures for national reconstruction and economic and social development. As of the date of this article (17 September 2026), the text is still pending enactment and publication in the Official Gazette, and the time limits described below depend on those steps.

Among the many matters addressed by the bill, one of the most relevant in practice for wealth and succession planning is the temporary 50% reduction in gift tax, applicable to gifts granted within a one year window.

The measure seeks to encourage gifts to be brought forward: the State collects revenue earlier and, in return, families gain an orderly succession with a lower tax burden than under the general regime.

The benefit is limited to gifts made by the donor in favour of forced heirs (that is, the heirs to whom the law assigns a share of the estate that the donor cannot disregard, such as children and the spouse) and beneficiaries of the cuarta de mejoras, that is, family members such as descendants, the spouse or ascendants, whom the donor may favour with the 25% of the estate that the Civil Code reserves for that purpose. Gifts to third parties outside this circle do not qualify for the reduction, unless the donor has no forced heirs or beneficiaries of the cuarta de mejoras at the time of the gift.

The reduction and how to obtain it

The benefit consists of a 50% reduction in the tax that, under Law No. 16,271, applies to the gift, and it operates only once for each donor. To obtain it, the gift must be granted by public deed.

Gifts under this regime are also released from the judicial authorisation procedure known as insinuación, that is, the court approval generally required in order to make a gift, which can take more than six months.

Because no court proceedings are required, these gifts attract far less publicity. This matters to those who, for security reasons, prefer not to disclose the details of their estate or the identity of the people to whom they transfer part of it.

Time limits

The public deed of gift must be granted, on a single occasion, within one year counted from the first day of the second month following publication of the law.

Within that same period, the corresponding return must be filed with the Chilean Internal Revenue Service (SII), in the manner that the SII establishes by resolution.

Limit on the amount gifted

The value of the gifts, adding together all gifts that a single donor places under this benefit, may not exceed 50% of the donor's total net worth, understood as the difference between assets and documented liabilities, valued in accordance with Law No. 16,271. Compliance with this limit, the status of each donee as a forced heir or beneficiary of the cuarta de mejoras, and the proportion assigned to each of them must be evidenced through a sworn statement filed by the donor with the SII.

Formalities and notarial control

The notary may not authorise the public deed of gift without prior evidence of payment of the tax (through the certificate issued by the SII) and of the filing of the sworn statement referred to above. Payment of the tax therefore becomes a condition precedent to completing the gift.

Exceptions and special rules

• Gifts between spouses. Gifts made under this regime are irrevocable and, for that reason, are subject to the tax, which is an exception to the general rule that gifts between spouses may be revoked.
• No aggregation. For the purposes of this benefit, gifts previously made by the same donor in favour of the same donee are not aggregated.
• Sale of the asset within three years. If the donee disposes of the asset within three years from the date of the deed, its tax basis will be the lower of the basis it had for the donor at the time of the gift and the general tax basis that would have applied to the donee. This limits the benefit of a gift followed by an immediate sale.
• Credit in future inheritances or gifts. For the purposes of the credit under article 23 of Law No. 16,271 in future inheritances or gifts from the same donor, the tax that would have applied without the reduction is deemed to have been paid. The benefit therefore does not reduce the credit available in the future.
• Financing of the tax. Where the gift consists of shares or equity interests, the rule allows the donee to finance the tax through loans or promissory notes granted by the same companies whose shares or interests are gifted, or by companies related to them. If those instruments are denominated in unidades de fomento and have a maximum term of ten years, the single 40% tax under article 21 of the Income Tax Law does not apply. If those conditions are not met, that tax does apply.

The opportunity for family businesses

One of the most relevant applications of this benefit is the succession of family businesses: it allows shares or equity interests to be transferred paying half of the ordinary tax and without prior court proceedings.

The difference compared with an unplanned succession is substantial. A planned gift allows half of the tax to be paid on a date chosen by the family itself and under a corporate governance framework defined in advance by the founder. An unplanned succession by inheritance, by contrast, exposes the heirs to the full tax, payable at a moment no one chose, and forces them to agree on the valuation and control of the company, often amid tension over the liquidity needed to pay the tax.

Lifetime giving as a wealth planning tool

From a wealth planning perspective, one of the most significant strategic benefits of lifetime giving is that it freezes the value of the donor's estate at the time of the transfer. Once the gift is completed, the income and returns generated by the asset become part of the donee's estate and fall outside the donor's future taxable estate. If those flows are reinvested, with the multiplying effect of compound interest, the resulting growth also falls outside inheritance tax.

The window that the Reconstruction Law will open intensifies this effect: it allows the transfer to be brought forward paying, on a single occasion, half of the tax that would have applied to the gift under the general regime, which lowers the cost of anticipating the succession.

Conclusions and recommendations

The temporary 50% reduction in gift tax is a concrete, though time limited, opportunity to bring forward wealth and corporate succession processes on favourable tax terms. It is, however, a benefit subject to formal and substantive requirements, and failure to meet them may deprive the taxpayer of the reduction.

For that reason, those considering this mechanism are advised to begin the preparatory work early (valuation of assets, definition of beneficiaries and proportions, review of bylaws and shareholders' agreements, and structuring of the financing of the tax), so as to be in a position to sign the public deed as soon as the window opens and to avoid a build up of formalities at the end of the period compromising access to the benefit.

Our tax and corporate law team is available to advise individuals and family businesses on this alternative and on the design of the gift structure best suited to their circumstances.