“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.

• La Rioja is a good example of this and benefits gifts between ascendants, descendants, and spouses who can apply a deduction on the tax due on gifts of 99% for amounts of 400,000 € or less or 50% if over 400,000.
  The gift must be formalized in a public deed although this is not necessary for insurance policies where the policy holder is not the recipient.
  Successive gifts will be subject to the rules of accumulation of donationsThere are more allowances for gifts of specific assets
• Reductions for gifts of an individual business or professional enterpriseThere is a reduction of 99% on the taxable amount for gifts to spouses, ascendants and descendants (including adopted and fostered), and close relatives up to and including cousins and for in-laws including aunts, uncles, nephews and nieces, of an individual business or professional enterprise situated in La Rioja on condition that the donor is 65 or older, or is disabled. The following must apply:

  a) The business or enterprise is not subject to wealth tax

  b) At the time of the gift the donor ceases to be active in the business or enterprise, including in a management role, and receives no more income from the same.

  c) The company must remain based for tax purposes and if it is the case physically in La Rioja for a period of 5 years.

  d) The recipient must retain ownership of the assets and not dispose of or reduce their value directly or indirectly for the period of 5 years.

  e) If the business or professional enterprise falls under the criteria of a cultural business according to the law of La Rioja the reduction will be 99.5%.

  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 shares in a company 

  There is a reduction of 99% on the taxable amount for gifts to spouses, ascendants and descendants (including adopted and fostered), and close relatives up to and including cousins and for in-laws including aunts, uncles, nephews and nieces, of shares in a company situated both physically and for tax purposes in La Rioja on condition that the donor is 65 or older, or is disabled. The following must apply:

  a) The business or enterprise is not subject to wealth tax. For the sole purpose of applying this reduction the 20% percentage set out in the Wealth Tax law will be calculated together with that of the beneficiary.

  b) The donor must own at least 5% of the capital of the company or 20% share-holding together with family members in a company.

  c) The donor must have had and then the recipient in his place must have a management role, receiving renumeration of more than 50% of the profits.

  d) At the time of the gift if the donor had a management role, he or she ceases to be active in the business or enterprise, and receives no more income from the same ( this does not include being on the Board of Directors).

  f) The company must remain based for tax purposes and if it is the case physically in La Rioja for a period of 5 years.

  g) The recipient must retain ownership of the assets and not dispose of or reduce their value directly or indirectly for the period of 5 years.

  If the business or professional enterprise falls under the criteria of a cultural business according to the law of La Rioja the reduction will be 99.5%.

  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 or rural land.There is a reduction of 99% for gifts to spouses, ascendants and descendants (including adopted and fostered), and close relatives up to and including cousins and for in-laws including aunts, uncles, nephews and nieces, of shares in a farm, rural land or the rights of “usofructo” in La Rioja 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 is a professional farmer at the time of donation and owns a farm to which the assets can be transferred.

  c) 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.
  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 as a result of crowdfundingThere is a reduction of 1,000€ for gifts from crowdfunding for cultural projects and activities, scientific investigations, technological development and innovation or sports ruled under the Law of Crowdfunding of La Rioja Comunidad Autónoma.
  The maximum limit of gifts for any tax payer in one year is 10,000€.
  If the conditions are breached or the gift is not used for the appropriate end 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 La Rioja or the gift is of other kinds of assets when the beneficiary is a resident in La Rioja.

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