The Twelve-Month Window: The 50% Reduction in Chile's Gift Tax and Estate Planning

Among the measures in the Bill for National Reconstruction and Economic and Social Development — also known as the "megarreforma" — passed by Congress on August 13, 2026, and which as of this column is still awaiting promulgation, there is a provision that was not challenged before the Constitutional Court, and which, for that reason, family estates and their advisors can already begin planning around: the temporary, one-time 50% reduction in the gift tax.

The benefit, as structured in the legal text, is narrower in design than the public discussion suggests, and that is precisely where the value lies in reading it carefully before recommending it to a client.

First, this is not a general reduction — only forced heirs may claim it, meaning children and a spouse, and those eligible to receive the "cuarta de mejoras". Gifts to third parties outside that circle fall outside the benefit, unless the donor has no forced heirs or discretionary-share beneficiaries at the time of the gift.

Second, and here is where the fine print matters, the first transitional article sets two estate-value limits that apply cumulatively, not just one. On one hand, "in no case may the value of the gift (...) exceed 50% of the donor's total estate," determined as the difference between the donor's assets and documented liabilities. On the other hand, it requires the donor to certify, by sworn declaration, "holding assets whose value is at least equivalent to double the amount donated." This second requirement, concerning what the donor retains after the gift, is always stricter than the first. So, if the total estate is P and the amount donated is D, requiring the remainder (P − D) to be at least double D is equivalent to D ≤ P/3. In practice, then, the effective ceiling of the reduction is not the 50% circulating in the public discussion, but one third of the donor's estate. Anyone who donates exactly the nominal 50% will not be able to certify the second requirement — the remainder would be equal to, not double, the amount donated — and will lose the benefit on the excess.

On formalities, the reform simplifies the process by eliminating the judicial authorization (insinuación judicial) currently required for gifts above certain amounts, requiring instead a notarized public deed executed within one year of the law's publication, together with a sworn declaration before the Internal Revenue Service (SII) certifying compliance with the legal requirements. The benefit is not permanent, since the law specifically states that it takes effect the month after the law's publication and runs for a period of twelve months, which sets up a clear temporary incentive for those already considering advancing their succession planning.

There are two additional elements worth keeping in mind when structuring a transaction under this regime. On one hand, the tax paid under the reduction is recognized as a full credit for purposes of a future inheritance, avoiding economic double taxation on the same asset. On the other hand, the donee may finance payment of the tax through loans denominated in Unidades de Fomento for a maximum term of ten years, which broadens the structuring alternatives when the donated estate is illiquid — which is generally the case with real estate or family company interests.

My reading, from advising family offices and business-owning families, is that this window should be evaluated case by case and with some urgency — not because the benefit disappears immediately, but because the twelve-month term requires organizing in advance a decision that normally takes time, and that requires asset valuation, defining the "cuarta de mejoras", coordination among the heirs and, where relevant, review of the corporate bylaws of the structures intended to be transferred.

One final clarification before making decisions on this basis. The text quoted corresponds to the first transitional article of the bill, according to the Joint Committee Report, Boletín N° 18.216-05 ("Proyecto de Ley para la Reconstrucción Nacional y el Desarrollo Económico y Social"), passed by Congress and pending promulgation and publication in the Official Gazette. Any specific application to a case must be verified against the final legal text, including its final article numbering and the exact effective date of the benefit.