Young people do not have it easy to get ahead in a context of very tight salaries and with him housing prices skyrocketed. Therefore, helping children or a family member financially becomes the natural impulse. However, this willingness to help may have tax consequences What is important to know before making the transfer.
In a binding query Addressed to the General Directorate of Taxes (DGT), a body dependent on the Treasury, a person raised the possibility of helping his family financially through a cash donation. The consultation made it abundantly clear: anyone who donates cash has nothing to fear on their tax return. The same cannot be said about the person who receives it.
What the Treasury says about the donor’s personal income tax. The General Directorate of Taxes responded to a person who wanted to donate cash to his mother. The DGT pulled the file and argued its response in a previous binding consultation, in which a father raised the tax consequences of donating cash to his children. The Treasury’s response establishes that “for the donation of money, no capital gain or loss will be computed for the donor,” which implies that on the part of the person who gives that money there is nothing to declare or pay in the Income Tax.
The technical reasoning is quite logical and simple. When money is donated, there is no difference between the value at which it was acquired and the value at which it is transmitted, so there is no alteration in the donor’s assets that justifies paying taxes on it, as established in article 33.1 of the Law on Personal Income Tax.
When the gift is not money, the story changes. The organization itself takes advantage of the consultation to remember that the exemption from personal income tax taxation Applies exclusively to cash donations. That means that if parents They donate a home to their children that they bought 20 years ago for 100,000 euros, and that at the time of donation its value is 200,000 euros, must pay personal income tax for that increase of 100,000 euros in its value between the date of purchase and the donation.
The same occurs with shares or other assets with market value that may increase in value between the purchase price and the donation price. The most curious thing is that this principle does not apply in the same way if that same property had lost value since its purchase, the donor would not be able to deduct that loss.
Children do pay the Gift Tax. It should be noted that the fact that the father does not pay personal income tax for that donation does not mean that the transfer of assets has no consequences for the person who receives it. The child who receives the money is obliged to declare the donation and settle the Inheritance and Donation Tax. This tax falls on the person who receives the donation, not on the donor.
The amount to be paid for the child or family member depends on factors such as the amount received, the degree of relationship and, above all, the autonomous community where the recipient resides for tax purposes. Depending on what requirements are met, the amount to pay may be close to zero euros, but it is necessary to complete the procedure. If the donation is not declared within the established period, the Treasury may impose penalties and interest.
A tax that depends on the communities. The Inheritance and Donation Tax is partially transferred to the autonomous communities, which means that each community sets its own bonuses, reductions and tax rates. This generates very notable differences between paying this tax in one community or another.
Madrid and Andalusia, for example, apply a 99% bonus on donations between parents and children, which in practice means that the recipient barely pays taxes when making this type of donation. At the opposite extreme, communities such as Catalonia or the Valencian Community have more demanding tax systems, with progressive rates and fewer bonuses. A particularly striking case is that of Extremadura, which has extended the exemption up to 200,000 euros in donations for children to buy their first home.
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