“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.

In Asturias there is a gift tax scale rate applicable to gifts made to ascendants, descendants and spouses, whose existing wealth is no more than 402,678.11€, excluding the habitual residence,  on condition that the gift is recorded in a public deed made within 30 working days of the gift, that goes from a mere 2% for gifts up to 150.000€

The rate will not be applicable to second or further donations from the same donor to the same recipient within a period of 10 years from the date of the gift unless the total amount of gifts have to be accumulated.

The source and means of transfer of cash gifts must be stated.

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

There is a reduction of 4% for gifts of assets taxable in Asturias to close relatives up to nephews and nieces (third grade) on condition that the donor is 65 or older, or is disabled, on top of other reductions under State Law. The following must apply:

a) The recipient must retain ownership of the assets for a period of 5 years.
b) At the time of the gift the donor ceases to be active in the business or enterprise and receives no more income from the same, although the donor can remain on the Board of Directors.
c) The entity does not have has its principal activity the ownership of assets but has a real economic activity.
d) 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 of agricultural holdings and elements affected to family members

There is a reduction of 99% on gifts from professional farmers to ascendants, descendants, spouses and close relatives up to nephews and nieces of agricultural businesses or an element affected such as the right of “usufructo” from in Asturias, on condition that:

a) In the case of elements affected the recipient or their spouse is a professional farmer at the time of donation and owns a farm to which the assets can be transferred.
b) The farm is in Asturias and has been operating for more than 2 years.
c) The recipient must retain ownership for 5 years.
d) 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 of an individual business, professional enterprise or shares in a company that belongs to the donor to non- family members linked to the company

A reduction of 95% of the value of the gift can be applied to unrelated recipients of gifts of a business, professional enterprise or share in a company located in Asturias on condition the donor is 65 or more or disabled as long as the following comply:

a) At the time of the gift the donor ceases to be active in the business or enterprise and receives no more income from the same, although the donor can remain on the Board of Directors.
b) The recipient has worked or provided a service to the gifted enterprise or business for a minimum of ten years.
c) They are entrusted with responsibilities in the running of the enterprise or business and have had that role for a minimum of five years.
d) The recipient must retain ownership of the assets for a period of 5 years.
e) The number of workers must be maintained at the same average number from the year before acquisition for 5 years.
f) The entity does not have has its principal activity the ownership of assets but has a real economic activity.
g) 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 start up, the expansion or acquisition of a business or professional enterprise

There is a reduction of 95% for gifts of which the full amount is destined to start up, expand or acquire a business (or share in a business as long as the number of partners is no more than 5) or enterprise based in Asturias, up to a limit of 120,000€ or 180,000€ if the recipient has a disability of grade 33% or more. The same limits apply to the sum of two or successive donations whether they are made from one or more donors. On condition that:

a) The gift must be formalized in a public deed which must be done within 30 working days stating if in cash it is to be used exclusively for setting up, expansion or acquisition of the business or if assets of another kind they are used for that purpose.
b) The gift must be spent within 6 months from the date of the first public deed.
c) The entity does not have has its principal activity the ownership of assets but has a real economic activity.
d) The business or enterprise must contract at least one full-time worker for a minimum of 1 year (not including the tax payer applying the reduction), and must continue in business in Asturias for a minimum of 5 years.
e) The recipient must be registered for tax purposes as a business or professional enterprise and have assets of no more than 402678.11€ excluding the habitual residence.
f) 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 cash gifts from ascendants to descendants for the acquisition of a first habitual residence registered as social housing

There is a reduction of 95% for cash gifts to acquire a first habitual social housing residence in Asturias for recipients under 35 (up to a limit of 60,000€) or with a disability of 65% or more (up to a limit of 120,000€), as long as the rent is not more than 4.5 times that stated in IPREM. The following conditions apply:

a) The gift is recorded in a public deed stating it is to be used solely to acquire the first habitual residence of the recipient and the recipient must retain ownership for 5 years.
b) The gift must be used within 6 months. No reductions will be applied to donations made after purchase.
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.

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

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