Spain Explained

There are no longer seven, now there are eleven reasons why a donation is really interesting in the Valencian Community (And another advantage in ISD for inheritances).

Last updated on March 15th, 2024 at 12:59 pm.

As you might already know from our previous publications, we can finally speak of a major modification to the inheritance and gift tax which implies an unquestionable improvement for the taxpayers of this tax and which undoubtedly favours and encourages donations in the Valencian Community, thanks to the transcendental and correct decisions of this autonomous community with regard to the deductions and allowances to be applied to the resulting tax payable, once this inheritance and gift tax has been calculated.

As you know, this tax is levied on the transfer of wealth and income, which can take place on the occasion of lucrative donations or on the occasion of a death when the inheritance is awarded.

There are many occasions in which it has been decided to donate a property in favour of one or several children, or even in favour of a parent or grandparent, but the possibility of donating between spouses was relegated or postponed because this kinship relationship was not considered to be eligible for the reductions and allowances that were applicable to the ISD tax payable in other donations made between other people with another kinship relationship.

Well, this is an important modification introduced by this Law, and it is now possible to benefit from allowances and deductions when a donation takes place between spouses.

Another important development concerns possible donations between grandparents and grandchildren.

Now the wish that any grandparent may have to donate a property to their grandchildren is now possible with the benefit of reductions and allowances in the resulting ISD tax payable, without it being necessary for the child of the deceased and father of the donee to have died beforehand.

Previously, for the application of the reductions and allowances provided for, it was necessary to take into account a maximum limit of the estate of the heir or donee, which has now disappeared with this modification.

And we leave for the end of this article the best of the novelties provided by this modification of the law, which without doubt not only favours donations in the Valencian Community, but also means that all those who are called to inherit can do so without being limited by whether or not they have sufficient wealth to pay the resulting tax (ISD).

This modification consists of a 99 percent rebate on the resulting ISD tax payable, which makes it viable in all cases to pay the tax and, consequently, to carry out a donation or inheritance process in the Valencian Community.

That is why we invite you to consider the possibility that you previously considered and decided to postpone because of the high cost.

We invite you to take up again those close relationships between grandparents and grandchildren, which motivated and today sustains some donations, because of the great viability that this means now, allowing that grandparent’s dream of donating to become a reality.

These amendments, approved on 23 November 2024 and effective from the following day (24 November), apply retroactively from 28 May 2023.

                You will no doubt remember our recent article, “SEVEN REASONS WHY A DONATION IS INTERESTING”.

Now, we must add FOUR MORE;

1.- The application of the kinship reduction in donations between spouses;

2.- The application of reductions and allowances in the case of donations from grandparents to grandchildren, without the need for the donor’s child and the donee’s father to be present beforehand;

3.- The elimination of the limit of the donee’s existing assets.

4.- And of course, the 99% rebate on the tax payable (ISD) also applicable to inheritance awards).

We say goodbye happy for the advantages that this legislative modification in the Valencian Community has not brought and enthusiastic for having shared with you the ELEVEN REASONS WHY A DONATION IS MORE THAN INTERESTING TODAY.

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Peter Spring

29 February, 2024 8:09 pm

I have made a will in Spain with Ábaco and have left my house to my 3 children would it be possible to consider donating or what would be the benefits

Bruce Moore

3 March, 2024 12:49 pm

Do these changes apply only to Valencia?
What is the situation in the rest of Spain?

Oscar Paoli

4 March, 2024 12:54 pm

Dear Bruce,
This applies to Valencia Region. We have 17 different regions in Spain and every single one of them have different variations unfortunately. Difficult to discuss them all here, but will see if our editor can write upcoming articles on the matter.
With kind regards,
Ábaco Advisers

Claes Carlsson

4 March, 2024 6:52 pm

Ingår Alicante-El Campello i Valenciaregionen?

Oscar Paoli

5 March, 2024 10:13 am

Hej Claes,
Självklart, det gör det.
Ábaco Advisers