Aragon Inheritance Tax. Reductions and Bonifications

Introduction

The Inheritance and Gift Tax is a state tax. It is regulated by Law 29/1987, of December 18, on the Tax on Inheritance and Gift Taxes and the Regulation that develops it is Royal Decree 1629/1991, of November 8.  But, this national tax can be adapted and improved by regions. So, for Aragon region, the Inheritance and Donation Tax is regulated and adapted by the regional law ORDEN HAP/1831/2018, de 7 de noviembre, por la que se dispone la publicación del
Texto actualizado de las disposiciones dictadas por la Comunidad Autónoma de Aragón en materia de tributos cedidos.

In this section we will detail exclusively  reductions, tax rate and bonus  on the Inheriance and Donation Aragon tax. For other aspects as Process of Inheritance, Executing a foreign Will etc, please, visit our Inheritance Process section, where all aspects and procedures may be reproduced in inheritance process independently of the specific executed region. 

Successions

Reductions in the tax base

– Minor children of the deceased

It regulates a reduction of the taxable base of 100% of its value to inheritance acquisitions that correspond to the children of the deceased who are minors. The amount of this reduction may not exceed 3,000,000 euros.

 – Disabilities

Application of a reduction in the taxable base of 100% of its value to inheritance acquisitions that correspond to people with a degree of disability equal to or greater than 65%.

– Acquisition of a sole proprietorship, professional business or shares in entities

In the mortis causa acquisition of a sole proprietorship, professional business or shares in entities, or the value of usufruct rights over them, by spouses and descendants or, failing that, for ascendants and collaterals up to the third degree, with certain requirements and conditions, a reduction of 99% of the net value of those included in the taxable base is applied.

– Spouse and ascendants and descendants

In this reduction in favour of the spouse, ascendants and descendants, the limit amount provided for is increased from 150,000 to 500,000 euros (from 175,000 to 575,000 euros in the case of disability) and the requirement according to which the taxpayer’s pre-existing assets could not exceed 402,678.11 euros is eliminated.

In addition, it extends to grandchildren and subsequent descendants of the deceased

– Sole proprietorship, professional business or shares in entities by successors other than the spouse or descendants

By virtue of this article, a reduction of 99% is applied to the net value that, included in the taxable base, corresponds proportionally to the value of the aforementioned assets

– Creation of companies and employment

Mortis causa acquisitions that are intended for the creation of a company, whether individual, professional business or corporate entity, will have a reduction in the taxable base of 99% when they meet the certain requirements.

– Habitual/Permanent residence

The reduction provided for in letter c) of section 2 of article 20 of the Tax Law for the acquisition mortis causa of the main residence of the deceased person will be 100% of the value of the home and the limit established in the third paragraph of the aforementioned article 20.2.c) is 200,000 euros.

– Siblings

By virtue of this article, this reduction amounts to €15,000.

Tax reate bonifications

– Habitual/permanent residence

It provides for a 65% discount  on the tax liability derived from the acquisition of the deceased’s main residence, provided that the real value of this does not exceed 300,000 euros, for the spouse, ascendants and descendants of the deceased.

– Reduction in the acquisition mortis causa by descendants, ascendants and spouse of the deceased deceased due to acts of terrorism or gender violence

It regulates a reduction of the taxable base of 100% of its value to inheritance acquisitions that correspond to the descendants, ascendants and spouse of the deceased deceased as a result of acts of terrorism or gender violence.

Donations

Reductions in the tax base

– Reduction for the acquisition of sole proprietorships or professional businesses

Reduction in the taxable base of 99% of the acquisition value of the assets and rights acquired in the event of inter vivos transfer of sole proprietorships or professional businesses.

– Reduction in the taxable base of the tax in favor of the donor’s spouse and children

It regulates, for donations in favour of the spouse and children, the right to the application of a 100 per cent reduction in the taxable base of the tax, the amount of this reduction being one or more donations, from one or more donors, added to the amount of the remaining reductions applied by the taxpayer for the concept “Donations” in the last five years,  less than or equal to 100,000 euros and the taxpayer’s pre-existing assets may not exceed 100,000 euros.

– Reduction due to the donation of shares

99% reduction  for the inter vivos transfer of shares exempt from Wealth Tax. The reduction will be conditional on compliance with quantitative and qualitative requirements.

– Reduction for the donation of shares in entities by donees other than the spouse or descendants

In the inter vivos acquisition of any right over shares in entities by the donees, other than the spouse or descendants, a reduction of 99% will be applied to the net value that, included in the taxable base, corresponds, proportionally, to the value of the aforementioned assets, subject to compliance with certain requirements.

– Reduction for donations for the creation of companies and employment

It regulates a reduction of the taxable base of 99%, when they meet the established requirements, for lucrative inter-vivos acquisitions that are intended for the creation of a company, whether individual, professional business or corporate entity.

Tax bonifications

– Bonus of the tax liability in favour of the donor’s spouse and children

65  % discount on the tax liability derived from lucrative inter vivos acquisitions as long as the taxable base is equal to or less than 500,000 euros.

–  Reduction in the taxable base of the tax in favour of the donor’s children for the acquisition of a main residence

In donations in favour of the children of money for the acquisition of a first habitual residence or of a real estate property for use as a first habitual residence, they will grant the donee the right to apply a 100% reduction of the taxable base of the tax.

It may not exceed the amount of 300,000 euros and the taxpayer’s pre-existing assets may not exceed 100,000 euros.