In Alava the tax due will be calculated by applying tariffs to the taxable amount rated on the closeness of kinship.

So, ascendants, descendants, spouses and unmarried partners will be taxed at a rate of 1.5%.

Other relatives and unrelated recipients are classified into three groups according to the closeness of kinship and taxed on progressive scales.

The following benefits have been ruled in Alava:

Reduction for gift of donor´s own home to a resident recipient

There is a reduction of 95%, with a maximum reduction of 212,242€ for gifts with full ownership of “usofructo”, “nuda propiedad”, land rights, or right of use or habitation of the house where the donor has lived with the recipient for at least 2 years continuously immediately before the gift, the house having been the habitual residence of both parties and both are registered in the town hall as residents with “certificación de empadronamiento” and “certificación de Convivencia.

Reductions for gifts of an individual enterprise, a professional business or shares in a company to family members

For gifts to a spouse, unmarried registered partner, ascendants and descendants (including adopted) there is a reduction of 95% as long as the donor is 60 or more or is permanently or severely disabled on condition that:

a) At the time of the gift the donor must cease to be active in the business or enterprise and receive no more income from the same, if that is the case (this does not include merely being a director).
b) The recipient must keep possession of the gift without doing anything to substantially reduce its value for a period of 5 years.
c) If the conditions are breached the recipient must pay the tax now owed plus interest.

Deductions for international double taxation

The lower amount of the following two will be deducted:

a) any similar tax paid abroad for the same assets
b) the result of applying the average rate that would have been applied for the assets here when a similar tax has been paid on assets abroad.

Accumulation of gifts

Any gifts that are not exempt from the same donor to the same recipient within a period of three years will be considered as one gift for tax purposes, counting from the date of the first gift, and the taxable amounts will be added together. Any tax already paid for previous gifts may be deducted from the tax due on the sum of the gifts.

Gifts such as those referred to above from the donor to recipient will be considered as one single transaction when the period between them is no more than three years, apart from those exempt through “mortis causa”, if the donor dies in this period. Any tax already paid for previous gifts may be deducted from the tax due on the inheritance.

The accumulation will be the sum of the value of the rights or assets gifted in the three years immediately prior to death.
If gifts have been made by both spouses or registered married partners of their jointly owned assets, the accumulation of value will only affect the proportion of the value belonging to the deceased. The value will that of the value at the moment of acquisition.

Life insurance policies will also be subject to this accumulation of value.