“Comunidades Autónomas” have their own inheritance and gift tax regulations as a result of the Spanish State ceding the tax revenue of inheritance and gift tax to the “Comunidades Autónomas”, along with some regulatory autonomy to adapt tax to the particular circumstances of each.

This means that most of them have ruled new (and huge) benefits compared to those established by the Spanish State.

While the tax scheme and regime is the same in all parts of Spain, the “Comunidades Autónomas” took advantage of their new powers to fix higher thresholds, or different rates or direct reductions on the amount to be paid (and sometimes all of these) to benefit close relatives of the deceased or disabled people. There are also benefits that help promote local business, farming, etc. as well as in the acquisition of cultural assets of each Comunidad Autónoma.

However, the regulations change quite frequently so it is necessary to check the regulation in force at the time the tax is due.

Aragón has ruled the following benefits:

Reductions for gift of an individual enterprise or a professional business

There is a reduction of 99% as long as the business or enterprise is retained for a minimum of 5 years unless the beneficiary dies within this period.

Reductions for gifts to spouses or children (article 132.2)

Independent of any other reductions that may be applicable from the Comunidad Autónoma de Aragón, there is a reduction of 100% for gifts to spouses and children with a limit of 100,000€ (for one, or the sum of more than one donation, from one or more donors within the previous 5 years. If the gift(s) exceeds this, the reduction is only applicable up to this amount). The following conditions apply:

a) The taxpayer´s assets must not exceed 100,000€
b) The tax declaration claiming the reduction must be voluntarily presented within 30 working days of the gift.

Grandchildren can also benefit from this reduction if their parent (a child of the donor) has died.

More over a deduction of 65% for gifts of 500,000€ or below can be applied by children and spouses, (incompatible with the above as well as incompatible with deductions for gifts for buying a residence or starting a business) and remembering that all gifts made within the previous 5 years are included in the same limits.

Reductions for gifts of shares to spouses and descendants

There is a reduction of 97% for gifts of shares as long as they are retained for a minimum of 5 years.

Reductions for gifts of shares to recipients other than spouses and descendants

Recipients of a share in a company, other than those related to the donor as stated above can apply a reduction of 30% of the value of the gift as long as the shares are retained for 5 years and they comply with the following at the date of making the public deed:

a) The entity does not have has its principal activity the ownership of assets
b) The company must have at least one full-time contracted employee, and must continue employing the average complement of staff ( based on the previous year) for a minimum of 5 years).
c) If the conditions are breached the recipient must inform the tax authority within 30 working days and pay the tax now owed plus interest.

Reductions for gifts to create businesses and work

There is a reduction of 30% on the value of an investment which creates a business whether, individual, professional or corporate with the following conditions:

a) The entity does not have has its principal activity the ownership of assets but has a real economic activity.
b) The business or enterprise must contract at least one full-time worker (not including the tax payer applying the reduction), and must continue in business with staff for a minimum of 5 years.
c) The business or enterprise must be established within 18 months of the donation.
d) The tax declaration claiming the reduction must be presented voluntarily within 30 working days of the gift.
e) If the conditions are breached the recipient must inform the tax authority within 30 working days and pay the tax now owed plus interest.
f) This reduction is incompatible with that of the reduction for gifts to spouses or children (132.2) and with the following deduction.

Reductions for gifts to children to acquire a first habitual residence

There is a reduction of 100% for gifts to children to acquire a first habitual residence or a property to be this residence, (first habitual residence conditions as set out in the state regulations) in a municipality of the Comunidad Autónoma de Aragón with the following conditions:

a) There is a limit of 250,000€, for one or more gifts from one or more donors, adding all gifts with reductions applied under the category of gift within the previous 5 years. If the limit is exceeded the reduction will be applied until the amount reaches that limit.
b) The taxpayer must not have assets of more than 100,000€.
c) For cash gifts the residence must be acquired within the 12 months prior to the donation or the 12 months afterwards.
d) The property must be retained for 5 years.
e) The tax declaration claiming the reduction must be presented within 30 working days of the gift.
f) If the donor dies within 5 years of the gift the amount of the reduction will be included in those to calculate successions if the beneficiary is the inheritor.

Grandchildren of the donor can also benefit from this reduction if their parent (a child of the donor) has died.
Children may also apply this reduction who have already owned a first habitual residence if that residence has been lost through problems with payment or repossession by the bank and they assessed as being in a vulnerable socio-economic situation.

• The question now is when can these benefits be taken advantage of?
  When the gift is of immovable assets located in Aragón or the gift is of other kinds of assets when the beneficiary is a resident in Aragón.

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