Changes in Inheritance and Gift Tax in Andalusia applicable as from 1st January 2022

On the 20th of October, Law 5/2021, on Assigned Taxes of the Autonomous Community of Andalusia, was published in the Official Gazette of the Junta de Andalucía, with novelties, among others, in the Inheritance and Gift Tax, novelties that come into force in 2022.

Let’s see what is new with respect to the previous regulation DL 1/2018, of 19 June, which approves the Consolidated Text of the provisions dictated by the Autonomous Community of Andalusia in matters of assigned taxes:

· Tax rate

The tax rate is modified, reducing the tax rate in all tax brackets. The minimum rate is 7% (previously 7.65%) and the maximum rate is 26% (previously 36.50%).

NET BASE UP TO €	INTEGRATED QUOTA	REST OF BASE TAXABLE INCOME UP TO €	TYPE APPLICABLE % OF
0,00	0,00	8.000	7
8.000	560	7.000	8
15.000	1.120	15.000	10
30.000	2.620	20.000	12
50.000	5.020	20.000	14
70.000	7.820	30.000	16
100.000	12.620	50.000	18
150.000	21.620	50.000	20
200.000	31.620	200.000	22
400.000	75.620	400.000	24
800.000	171.620	En adelante	26

· Multiplier coefficients

The coefficients applicable according to the degree of kinship are modified and the variation according to pre-existing assets is eliminated, as was previously the case, leaving only the following coefficients for any assets prior to the succession or donation:

Groups I and II	Group III	Group IV
1,0	1,5	1,9

· Deadline for submission of the self-assessment

In the case of donations, the deadline for the liquidation and presentation of the tax is extended to two months instead of one, while the deadline for mortis causa liquidations is maintained at six months.

· Reductions

– Acquisitions “mortis causa” and “inter vivos” of sole proprietorships, professional businesses and shareholdings in entities.

The rule provides for situations of retirement or disability at the date of death of the testator, so that the requirement that the activity constitutes the main source of income in the case of professional businesses and sole proprietorships is eliminated.

The requirement that the remuneration for management functions, in the case of shareholdings in entities, should account for at least 50% of the total business, professional and personal work income is also eliminated. It is a sufficient requirement that the testator or one of the persons in the kinship group (with or without a shareholding in the entity) receives remuneration for the exercise of such functions.

What has been inherited or received as a gift must be kept for a period of 3 years, the degree of kinship between the transferor and the acquirer being irrelevant. In addition, the requirement that the assets acquired be exempt from Wealth Tax has been eliminated.

– Other reductions for acquisitions “mortis causa”

Acquisition of the main residence

The reduction percentage is set at a fixed amount of 99% regardless of the value of the property. Previously, the reduction was by brackets, with the reduction being 100% for properties with a value up to 123,000 euros and 95% for properties with a value of more than 242,000 euros.

Reductions for kinship

The reduction applicable to kinship groups I and II will be 1,000,000 euros, regardless of their pre-existing assets. For those in group III the reduction is up to 10,000 euros.

Taxpayers with disabilities

The reduction for these taxpayers is applicable regardless of the degree of kinship and pre-existing assets, as follows:

• 250.000 euros if the degree of disability is equal to or greater than 33% and less than 65%.
• 500.000 euros, if it is equal to or greater than 65%.

– Other reductions for “inter vivos” acquisitions.

Donation of money for the purchase of the main residence.

This reduction may be applied, even if the money received is not for the purchase of your first main residence.

The maximum base for the reduction is increased to 150.000 euros in general (previously 120.000 euros) and to 250.000 euros when the recipient is considered to be a person with a disability.

The scope of application is extended to victims of domestic violence and terrorism.

Donation of the habitual residence to descendants.

The scope of application is extended to minors under 35 years of age, victims of domestic violence and terrorism.

Donation of money to family members for the incorporation or extension of an individual company or professional business.

The company must be maintained during the three years following the date of the donation, regardless of the relationship group (previously the period was 5 years for Group III).

· Modifications to the 99% quota bonus

There are no modifications to the 99% tax credit, it is maintained for taxpayers included in kinship groups I and II.

In the case of donations, in the case of delivery of assets, it is necessary that the donation is formalised in a public document and that the delivery of the asset is simultaneous.

On the other hand, when the donation is in cash, the public document must be formalised within a maximum period of one month from the date of delivery.