“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.

To calculate gift tax the following reductions in the instances stipulated by the Autonomous Community of Valencia can be applied, without detriment to the reductions under Spanish State Gift Tax.  Once the tax has been calculated there is a further

Deduction of 99% for spouse, parents and children (including adopted), grandparents and grandchildren.

Acquisitions by children or adopted children under the age of 21, a reduction of 100,000€, with an additional 8,000€ for each year below the age of 21, the maximum total reduction being 156,000€.

Acquisitions by children or adopted children aged 21 or over, by spouses and by parents or adopted parents, a reduction of 100,000€.

Acquisitions by grandchildren, a reduction of 100,000€ for grandchildren aged 21 or over, and for grandchildren under 21 an additional 8,000€ for each year below 21, the maximum total reduction being 156,000€.

Acquisitions by grandparents, a reduction of 100,000€

Bear in mind that all gains acquired by gift from the same donor in the five years prior to the moment of the last gift will be taken into account for the limits of each reduction.

For the application of the reduction, the acquisition must be made in a public deed or be formalized in this manner within one month. Furthermore, when the gift is of cash, the origins of the cash must to certified in the public deed and the means by which it is delivered to the recipient.

Reductions for people with a disability

• For acquisitions by people with a physical or sensory disability with a grade of 65% or over, and for people with a mental disability with a grade of 33% or over, a reduction of 240,000€ will be applied.

• For acquisitions by people with a physical or sensory disability with a grade of disability of 33% or more who are parents, adopted parents, children or adopted children of the donor a reduction of 120,000€ will be applied. The same reduction, with the same requirements applies to grandchildren, provided that their parent who was the donor´s child has died by the time of the gift, and to grandparents, provided that their child who was the parent of the donor has died by the time of the gift.

Bear in mind that all transfers from the same donor in the five years prior to the moment of the last gift will be taken into account.
In both cases the application of these reductions are compatible with those that may correspond by kinship as described above.

Reductions for women who have suffered domestic violence

For gifts made to female victims of domestic violence in order to acquire a habitual residence in the Autonomous Community of Valencia a reduction of 95% will be applied on condition of the following:

a) The maximum reduction is 60,000€ per tax payer, whether in one or more donations.
b) The home must be purchased within 12 months from the donation. If there is more than one donation, the time limit starts from the date of the first gift. The reduction will not be applied to gifts of money made after the house is bought, except in cases of payment by instalments or external finance on condition that the amount of money donated has been allocated within the same period of one year to the payment of the pending amount or to the total or partial cancellation of the credit.
c)The recipient may not own another home apart from the one she shared with the perpetrator of the domestic violence.
d)The gift must be formalized in a public deed which states the purpose of the gift is for the purchase of a home or to pay an amount owed or the total or partial cancellation of the credit.

To prove a situation of gender violence, it must be in accordance with Valencia´s law against violence to women.

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

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