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Donation in Andalusia: what is it and what taxes do I have to pay?

ODICE LAWYERS

Donation consists of the transfer of ownership of real estate (home, garage, premises, etc.), movable property (vehicle, furniture, jewellery, etc.), money or a right, without receiving anything in return. Currently, the donations in Spain are regulated by the Inheritance and Gift TaxThe management of which is devolved to the different autonomous communities. For this reason, in this article we will focus on the donations in Andalusia, in particularin cash donations.

What is donation?

According to the Civil Code, a donation "is an act of liberality by which a person freely disposes of a thing in favour of another, who accepts it" (Article 618 C.C.). 

In Spain, donations are often used to help a relative to buy a house or a car, or even to divide the inheritance so that it can be enjoyed during life.

From what amount of money is it considered a "donation"?

Many people think that there should be a minimum amount for which giving money is considered a "donation", but this is not the case. Currently, any type of monetary transfer is considered as a donation, regardless of the amount of the donation..

Requirements for donation in Andalusia

When you want to make a donation, it is important to sign a private contract of donation of goods or money, in which the acceptance by the recipient is stated, or by the execution of a public deed before a Notary Public, which may entail tax benefits in certain cases, as we will see below. There are also other requirements in order to carry out the donation:

  • The money transfer has to be made before going to the notary. and the deadline of 30 days for appearing before a notary and settling the gift tax must not be exceeded.
  • In the event that the object of the donation is cashThe origin of the funds must be justified and must be stated in the public document formalising the transfer. For example: indicate that the origin of the money is the savings derived from the donor's work, from a purchase or sale, etc.
  • For the donation to be validIf you do not have a job, you have to continue to own property or money that allows you to live.
  • The donation can be made to whomever you wish - it does not have to be a family member. However, in the case of children, and if it is carried out as a division of the anticipated inheritance, it must be taken into account that they should not receive more assets than they would be entitled to by inheritance.

Donations in Andalusia: Inheritance and Donations Tax

All donations are subject to Inheritance and Gift Tax, which varies depending on the amount donated and the Autonomous Community that manages it.

Requirements for the exemption of 99% from the tax liability in Andalusia

Since April 2019, Andalusia enjoys a 99% rebate on the tax liability for donations (Decree Law 1/2019 of 9 April 2019), provided that the following requirements are met:

  • The donation must be made to persons included in groups I and II of Art. 20.2 of the Inheritance and Gift Tax Law (Law 29/1987 of 18 December 1987).
    • Group I. Descendants or adopted children under 21 years of age.
    • Group II. Descendants or adoptees, 21 years of age or older. Spouses, ascendants or adoptive parents (In Andalusia, unmarried couples registered in the Registry of Unmarried Couples of the Autonomous Community of Andalusia, or other similar registry of other Public Administrations, will be treated as spouses).
  • The donation must be formalised in a public document
  • The origin of the funds must be justified in the case of cash donations.  

For more information on Inheritance and Gift Tax in Andalusia, click here.

Who has to pay Inheritance and Gift Tax on donations in Andalusia?

The donee, i.e. the person who receives the money or property. To pay the Inheritance and Gift Tax, it is necessary to go to the Settlement Office of the Autonomous Community of the place of residence, to settle and pay the tax. 

Law Firm specialising in Donations in Malaga

Before starting the donation procedure in Malaga, it is important to have professional advice. At Ódice Abogados, we guarantee you an optimal service with total guarantee when it comes to managing your donation. anticipated donation or division of inheritance in Malagain an agile and legal manner.

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