“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.

Galicia has ruled the following benefits:

Reductions for cash gifts to descendants for the acquisition of a first residence

There is a reduction on tax due on cash gifts to descendants for the acquisition of a habitual residence in Galicia of 95%, as long as they comply with the following:

a) The recipient must be under 35 and the acquisition must be of a first habitual residence, or a female victim of gender violence (under Galician law) in which case she must not own another house.
b) The limit is 60,000€ in total for either one or successive gifts, from one or more donors. The right to the reduction is lost If the total exceeds this limit.
c) The taxable income from the last tax declaration of the beneficiary before the first gift, after personal and family allowances, must not be above 30,000€.
d) 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 habitual residence as is the case and must be made at the same time as the gift.
e) The acquisition of the residence, must be made within a period of 6 months from date of donation, or from the date of the first gift if more than one. The reduction will not apply to gifts made after purchase unless it was on the basis of payment by instalments or loan.

Reductions for gifts of shares in an individual business, professional enterprise or shares in a company.

There is a reduction of 99% for gifts to descendants, spouse, nephews and nieces, on condition that the donor is 65 or older, or is permanently or severely disabled. The following must apply:

a) If the donor has had a management role in the company they must cease doing so and receiving payment within one year. This does not include being on the Board of Directors.
b) The business or company is based physically or for tax purposes in Galicia and it is maintained for a period of 5 years.
c) The donor must own at least 50% of the capital of the company individually or together with family members, or a 5% individual share-holding or 20% share-holding together with family members in a company.
d) The recipient must retain ownership of the assets for a period of 5 years.
e) The business, enterprise or company must have been operational for more than 2 years.

Reductions for gifts of agricultural holdings or rural land.

There is a reduction of 99% for gifts to spouse, close relatives and in-laws up to and including cousins, of shares in a farm, rural land or the rights of “usofructo” in Galicia if the donor is 65 or older, or is permanently or severely disabled. The following must apply:
a) The donor is a professional farmer and will cease to be as a consequence of the gift.
b) The recipient must retain ownership and continue as a working farmer for 5 years from the date of the gift unless they die in that period or the farm is transferred under an agreement of succession.
c) The farm has been operating for more than 2 years.

Reductions for gifts of woodland forming part of a forestry business

There is a reduction of 99% for gifts of woodland forming part of a forestry business.

Reductions for gifts to descendants to create or acquire an individual business or professional enterprise

There is a reduction of 95% for gifts of whatever kind (with a limit of 118,750€ or 237,500€ if the recipient has a disability of grade 33% or more, for either one or successive gifts, from one or more donors) to children and descendants to start up or acquire their first individual business or professional enterprise. On condition that:

a) Full ownership is acquired, or full ownership if shares which allow control of a society. The number of partners in the enterprise or business is limited to 5, except in some circumstances such as co-operatives and worker owned companies.
b) The recipient must register as a business or enterprise for the first time or if member of a co-operative must not have been registered in that sector before.
c) The entity does not have has its principal activity the ownership of assets but has a real economic activity.
d) The taxable income from the last tax declaration of the beneficiary, after personal and family allowances, must not be above 30,000€ and assets must not exceed 250,000€ excluding their habitual residence.
e) The gift must be documented in a public deed within one month of the donation stating in the case of cash it is destined only for the foundation or acquisition of the recipient´s first business or enterprise or of assets they are related to the business.
f) The acquisition or founding must be done within a period of 6 months from date of public deed, or from the date of the first gift if more than one. The reduction will not apply to gifts made after purchase unless it was on the basis of payment by instalments or loan.
g) The business or individual enterprise, or company is based physically or for tax purposes in Galicia, and must be maintained for 4 years.
h) The business or enterprise must contract full-time workers habitually resident in Galicia for a minimum of 1 year (not including the tax payer, or partners), unless it is a co-operative or worker owned enterprise.

Reductions for gifts of rural land

There is a reduction of 99% for gifts of rural land to spouses, close relatives and in-laws up to and including cousins, on condition that:

a) The gift is recorded in a public deed.
b) The land is not neglected or if so, it is restored within a period of 1 year.
c) The land is maintained in a good state for a period of 5 years.
d) The reduction does not apply to any building on the land which is not connected with a functioning agricultural enterprise unless it is incorporated into the enterprise within 1 year. Once incorporated the recipient has 1 month to present a supplementary tax declaration paying any additional tax owed plus interest.