VALUE OF AN INDIVIDUAL ENTERPRISE (SOLE TRADER) OR COMPANY
The acquisition of an individual enterprise, professional business or share in a company, in nuda propiedad, or in usufructo, by virtue of an inheritance process, permits the deduction of 95% of the value of assets necessary for the running of the activity if it has been managed habitually, personally, and directly by the deceased, and was his or her main income.Beneficiaries of this deduction are descendants. However, if there are no descendants, then ascendants may be beneficiaries, and if there aren’t any ascendants, then collaterals up to the third grade may be beneficiaries.
The widow or widower will always benefit.
The value of the assets must be kept in the circle of the beneficiaries during the next ten years.
It is not necessary to run exactly the same business.
The benefit is also applicable to the share in a company, limited proportionally, to the 95% of the value of the assets directly involved in the running of the business if the deceased had at least 5% of the capital and derived at least 50% of his or her income from his activity in the management of the company.
However, the benefit is still applicable if the deceased had, jointly with a family group (ascendants, descendants spouse or collaterals up to second grade), 20% of the capital, and when the requirement of earning at least 50% of his or her income from the management of the company is fulfilled by him or her, or any of the members of the family group.
There are some variations in each Comunidad Autónoma
In Andalucía, The beneficiary must retain ownership during a time period of three years and the beneficiary of the reduction could be a non-relative if he has been an employee or has provided services during a period of ten years of which at least five must have been in management or in some other position of responsibility.
In Aragón a benefit of 30% of the value is added if the beneficiary is an unrelated person, provided that the enterprise has at least one employee and that the acquiring party maintains the same number of employees during a period of five years. This percentage has been raised to 50% since 1/11/2018 and even to 70% in «Empresas de reducida dimensión»
Also since that date ( 1-11-2018) in the acquisition by ascendants descendants, spouses and collaterals to the third grade, the percentage of reduction has been raised to 99 % with the obligation of maintaining the value of the assets within the family
In Asturias, an additional 4% is added over the State Law reduction.
Since the first of june 2017: THE TIME TO KEEP THE ACQUISITION IS REDUCED TO FIVE YEARS
There is a new reduction of 95% of the money or value of the assets destined, with a limit of 125.000 ( 180.000 if the beneficiary is disabled) for the creation of a new enterprise or professional business. It is neccesary to contract an employee full time and at least for a year and that the new enterprise were domiciled in Asturias the next five years,
In Baleares the time of ownership is reduced to five years.
The reduction reaches 99% if the enterprise is a cultural, scientific, technological or sports enterprise.
In the Canary Islands the time of ownership is reduced to five years.
The reduction reaches 99% if the beneficiary is a descendant or spouse.
In Cantabria the time of ownership is reduced to five years.
The reduction reaches 99%.
In Castilla La Mancha: The Comundad Autónoma’s law allows an additional 4% on top of the reduction permitted by state law.
In Castilla León the time of ownership is reduced to five years.
The reduction reaches 99%.
In Cataluña the time of ownership is reduced to five years.
The beneficiary of the reduction can be non-related provided that he or she has been an employee or has provided services during a period of ten years of which at least five must have been in management or in some other position of responsibility.
If the share is in a company defined as “sociedad laboral,” the reduction increases to 97%.
In Extremadura the time of ownership is reduced to five years.
The reduction increases to 100% if the beneficiary is the partner of the deceased or descendant, ascendant or collateral up to the third grade.
This is also applicable for the share in a company if the deceased shared al least 50% of the capital.
The beneficiary of the reduction could be a non-relative if he has been an employee or has provided services during a period of five years of which at least three must have been in management or in some other position of responsibility.
In Galicia the time of ownership is reduced to five years. The beneficiary from 1-1-2020 can be up to the sixth grade of kinship
The reduction increases to 99%.
In La Rioja the time of ownership is reduced to five years.
The beneficiary could be in the collateral line up to the fourth grade.
In Madrid the time of ownership is reduced to five years.
In Murcia the time of ownership is reduced to five years.
The reduction increases to 99%.
Since the first of January 2018 the beneficiaries can be relatives up to fourth grade.
In Valencia the time of ownership is reduced to five years.
The reduction increases to 99%.
In the acquisition of an individual enterprise, professional business or share in a company, there are some modifications for inheritances opened after the 1-1-2017 that consist of limiting the benefits that the special regulation of Comunidad Autónoma Valenciana establishes to small enterprises or businesses according to their turnover. (There is always the reduction available by State Law). Preferences within the kinships in those reductions have been removed in Comunidad Valenciana ́s law. Now any ascendant, descendant, spouse, non married partner or colateral till the third grade who acquires the enterprise or a share in it can benefit independently of the other inheritors.
In Vizcaya the time of ownership is reduced to five years.
In Guipuzkoa the reduction is 75%.
In Álava the time of ownership is reduced to five years.
