Positive topological entropy and distributional chaos are characterized for hereditary shifts. A hereditary shift has positive topological entropy if and only if it is DC2-chaotic (or equivalently, DC3-chaotic) if and only if it is not uniquely ergodic. A hereditary shift is DC1-chaotic if and only if it is not proximal (has more than one minimal set). As every spacing shift and every beta shift is hereditary the results apply to those classes of shifts. Two open problems on topological entropy and distributional chaos of spacing shifts from an article of Banks et al. are solved thanks to this characterization. Moreover, it is shown that a spacing shift has positive topological entropy if and only if is a set of Poincar'{e} recurrence. Using a result of K\v{r}'{\i}\v{z} an example of a proximal spacing shift with positive entropy is constructed. Connections between spacing shifts and difference sets are revealed and the methods of this paper are used to obtain new proofs of some results on difference sets.

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