“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.

Cataluña has ruled the following benefits for gifts:

Reductions for the gift of an individual enterprise or a professional business

For gifts made to a spouse, ascendants, descendants, siblings, uncles, aunts, nephews and nieces, including adopted relatives and in-laws, a reduction of 95% of the value of the gift can be applied.

This reduction will also be applicable to those people who do not have a family relationship with the donor as long as they comply with the following at the date of donation:

a) They have worked or provided a service to the gifted enterprise or business for a minimum of ten years.
b) They are entrusted with responsibilities in the running of the enterprise or business and have had that role for a minimum of five years.

The following must be complied with to apply the reduction:
a) The donor has run the business personally on a regular basis.
b) The donor is 65 years of age or over, or has a permanent or severe disability or has taken early retirement from farming.
c) The income derived from the gifted enterprise or business are at least 50% of all the income, the capital and economic activity of the donor.
d) The recipient must retain ownership for at least 5 years from the date of the public deed formalizing the gift, unless they die within this period.

Reductions for the gift of a share in a company that belongs to the donor to family members

For gifts made to a spouse, ascendants, descendants, siblings, uncles, aunts, nephews and nieces, including adopted relatives and in-laws, a reduction of 95% of the value of the gift can be applied.

This reduction does not apply to shares in an institution of collective investment.
The following must be complied with:

a) The donor is 65 years of age or over, or has a permanent or severe disability.
b) The entity does not have has its principal activity the ownership of assets but has a real economic activity.
c) The donor must have an individual holding of at least 5% in the equity of the company, or 20% when calculated with the holdings of a spouse or registered unmarried partner, ascendants or descendants, siblings and uncles and aunts, nephews and nieces, including adopted relatives.
e) The donor has had a managerial role in the company and their income derived from that is at least 50% of all the income, the capital and economic activity of the donor.
f) 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.

The recipient must retain ownership for at least 5 years from the date of the gift, unless they die within this period.

Reductions for the gift of a share in a company to non-family recipients linked to the company

Recipients without the specific family relationship to the donor detailed above can apply a reduction of 95% of the value of the gift as long as they comply with all the conditions above and:

a) They have worked or provided a service to the gifted enterprise or business for a minimum of ten years.
b) They are entrusted with responsibilities in the running of the enterprise or business and have had that role for a minimum of five years.
c) The share of the recipient in the capital of the company as a result of the gift will be more than 50%.

Reductions for cash gifts to start up or acquire an individual enterprise or professional business or shares in a company

A reduction of 95% can be applied for cash gifts (with a maximum reduction of 125,000€ or 250,000€ for recipients with a disability of 33% or more, in total for either one or successive gifts, from one or more donors) from ascendants to descendants aged 40 or under. When successive gifts are made only those that are made within 6 months of the foundation or acquisition may have the reduction applied. The reduction is on condition that:

a) The business or individual enterprise, or company is based physically and for tax purposes in Cataluña.
b) The gift must be documented in a public deed within one month of the donation stating it is destined only for the foundation or acquisition of the recipient´s first business or enterprise or acquisition of their first shares.
c) The acquisition or founding must be made within 6 months of formalizing the donation.
d) The existing assets of the recipient cannot be greater than 300,000€.
e) The individual enterprise or professional business does not have as its main activity only the possession of assets.
f) There must have been no link between the business or enterprise acquired and the recipient, also there are limits on the amount of turnover of the acquired business or enterprise.

The recipient must continue to have a managerial role in the enterprise, business or company and must retain ownership for a minimum of 5 years from the date of the public deed formalizing the gift, unless they die within this period.

Reductions for gifts of assets of cultural heritage

For gifts made to a spouse or descendants a reduction of 95% of the value of assets of national cultural interest and for movable assets registered as of Catalan cultural heritage, also for registered assets of historical or cultural heritage from other autonomous communities may be applied.
The recipient must retain ownership of the assets for a period of five years following the donation unless they die in this period or the assets are transferred free to the Cataluña State or local authorities.

Provisions for the above reductions

1. The reductions detailed above are applicable both to full ownership and to “nuda propiedad”.
2. The recipient must not make provisions that result in the reduction in value or the rights of the donated assets (with some exceptions such as the result of natural disasters). If they do so, a new tax declaration will have to be made, so losing the benefits stated above and having to pay interest on the amount of tax that was not paid at the time.

Reductions for the gift of a house or for the gift of money to buy a house to be a first habitual residence

For gifts to descendants of a house or for the gift of money to buy a house to be a first habitual residence a reduction of 95% of the value of the house or amount can be applied, with a maximum reduction of 60,000€ or 120,000€ for recipients with a degree of disability of 65% or more.
The limits above apply to the total amount whether one or more donations are made and whether from one or more ascendants, and also whether the gift is only money or a combination of a residence and money. In the case of gifts of money, the reduction is only applicable to those donated within 3 months of the acquisition of the property.
The following conditions apply:

a) The gift must be recorded in a public deed stating that the gift is to be used for the purposes of acquiring a first habitual residence or the house gifted is to become the first habitual residence of the beneficiary. If the gift is in the form of money the deed must be made recorded within one month of the gift.
b) The recipient must be 36 years old or younger unless they have a disability of 65% or more.
c) The taxable income from the last tax declaration of the beneficiary, after personal and family allowances, must not be above 36,000€.
d) If the donation is of money, the beneficiary must acquire the residence within 3 months of the date of a single gift, or of the first gift if more than one.

What is considered a habitual residence?

a) A habitual residence is as defined in the income tax regulations. Moreover, a storeroom and up to 2 parking places may also be included, despite not being acquired at the same time as the residence, as long as they are located in the same building or complex and at the time of transfer they are at the disposal of the donor without having been granted to a third party.
b) A first habitual residence is considered to have been acquired if the entire property is under full ownership, or ownership of a part that cannot be divided shared with a spouse or future spouse.

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

For contributions to disabled people there is a reduction of 90%.

Gifts to not for profit organisations

A reduction of 95% can be applied to gifts to registered not for profit organisations.
The following are excluded:

a) Gifts to bodies registered in the Departments of Law and Justice or similar administrations with links to political parties.
b) Gifts to political parties, religious associations, sporting associations, business associations or unions registered by the Cataluña administration or other public administrations.
c) Gifts of property/real estate.

The reduction in on condition that:

a) The organisation must have been registered and fully operating for at least 2 years before the donation and be up to date with their accounts.
b) The donation should fit within the organisation´s aims and should be formalized in either a public or private document within one month of the donation. The document must include all details of the donor and recipient including the aims of the organisation, the object or money donated, the reason for doing so and the ends to which they will be used allowing for provision if necessary of any excess to be returned.
c) For cash gifts there are further limits on the time limits and manner of making the donations.