REFORM OF INHERITANCE AND DONATIONS TAX IN CATALONIA

 

At the end of April the Parliament of Catalonia approved Law 4/2020, of April 29, on the budgets of the Generalitat of Catalonia for 2020, published in the Official Journal of the Generalitat of Catalonia (DOGC) on the 30th of April 2020 and which entered into force the day after its publication.

The inheritance and donation tax is one of the taxes that are assigned to the autonomous communities. Title II of the law is structured in four chapters and chapter II contains the measures referred to inheritance and donation tax, which amends Law 9/2010, of June 7, on the regulation of inheritance and donation tax. On the one hand, in the field of tax base reductions, the maintenance rule established for the enjoyment of the 95% reduction applicable to the acquisition mortis causa of cultural heritage assets is modified, in order to give – him the same treatment that he already has in the event of donation of this type of property. On the other hand, a new reduction is created for donations and other lucrative transfers between living persons that are comparable to receipts from foundations and associations that fulfill purposes of general interest, and the scope of application of the reduced rate established by article 57.2 of Law 19/2010, regulating the tax on inheritances and donations, with the exclusion of life insurance contracts that are considered legal businesses comparable to in accordance with the tax regulations. The modifications with the greatest impact are: the reintroduction of the multiplier coefficients depending on the pre-existing assets for taxpayers of groups I and II, and the modification of the system of bonuses in the quota.

In summary, there are two important modifications, on the one hand, the one affecting the inheritances of descendants (children or grandchildren), ascendants (parents or grandparents) or spouses, these taxpayers enjoyed bonuses compared to the other degrees of kinship With the 2020 budgets, the bonuses for those people who already have pre-existing assets of more than 500,000 euros are eliminated, that is to say, those who have personal assets of more than 500,000 euros will have to pay more tax despite inheriting from direct relatives, consanguineous or affinity

On the other hand, the bonuses for children and parents who receive inheritances have been reduced, although the 99% for spouses remains, therefore, for the others the bonuses are reduced as the value of the inheritance Up to 100,000 euros, a bonus of 60% is applied, at the most, which is gradually reduced until it is eliminated from 3,000,000 euros.

Taxpayers of degrees of kinship I (father, mother, son, daughter, spouse, father-in-law, mother-in-law, stepson, stepdaughter) and II (grandfather, grandmother, grandson, granddaughter, brother, sister) are not entitled to the bonus in the case they choose to apply any of the reductions and exemptions regulated in the tax law itself, in particular, in paragraph 4 of article 58 bis of Law 19/2010.

Good succession and tax planning of the inheritance is necessary to be able to dispose of the transfer of the mortis causa assets with a lower tax impact for our heirs and legatees. If you have any doubts, ask us.

May 7, 2020.
M. de Montserrat Romaguera Edo