Castilla León

Gift tax Castilla León

“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.

Castilla León has ruled the following benefits:

Reductions for gifts to “Patrimonios Protegidos” for disabled people.

For gifts to disabled people there is a reduction of 100%, with a limit of 60,000€.

Reductions for gifts for the acquisition of a first residence

There is a reduction of 99% for gifts from ascendents, or adopted ascendents for the purchase of a first habitual residence as long as the following conditions apply:

a) The recipient is under 36 or has a disability of grade 65% or more
b) That the whole donation is used to buy the first home
c) The residence is located in the Autonomous Community of Castilla León
d) The acquisition of the home which is going to be the main residence must be carried out within the same tax period of the declaration of the donation (one month), and supported by the sale document which must state the amount of donation received and that it has been used for the payment of the residence.
e) The maximum amount with a right to reduction is 180,000€, with a maximum of 250,000€ if the recipient has a disability. These limits apply whether one or more donations.

Reductions for gifts to family members to start up or expand an individual enterprise or professional business

A recipient who receives a gift from an ascendent or family member up to the third grade (aunts and uncles) including relations by marriage, to start up or expand an individual enterprise or professional business can apply a reduction of 99% as long as the following conditions apply:

a) The business or individual enterprise is based physically and for tax purposes in Castilla León
b) The gift is recorded in a public deed, and if a cash gift stating that it is to be used exclusively for the purposes of establishing or expanding the individual enterprise or professional business and that it complies with the conditions stated here.
c) If the gift is in cash the individual enterprise or professional business must be established or expanded within six months of the registering of the donation
d) The individual enterprise or professional business does not have as its main activity only the possession of assets.
e) The individual enterprise or professional business established or expanded as a result of the gift is kept for five years from the date of the public deed which records the gift, unless the recipient dies within this period.

In reductions for gifts of shares in a business the reduction has been improved to 99% from 95% on condition that the workforce is retained for a period of 3 years from the date donation.

Deductions for gifts

There is a deduction of 99% for spouses, descendants and ascendants, both natural and adopted. Unmarried partners are treated the same as married ones as long as the relationship has been recorded in the register of unmarried partners of Castilla León for at least 2 years.
The gift must be recorded in a public deed. Any gifts in cash must have the origin of the funds recorded and justified in the public deed.

  • The question now is when can these benefits be taken advantage of?

    When the gift is of immovable assets located in Castilla León or the gift is of other kinds of assets when the beneficiary is a resident in Castilla León.

  • Any Questions?

    Contact us for specific personal advice for your individual case