How Can I Make a Monetary Donation to a Family Member

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What we understand by monetary donation

  We understand by monetary donation the act by which a person holding a property transfers it to another without receiving anything in return. The person who transfers the property we will call the Donor, while the person who receives it will become the Donee. To become a Donor of a property and make a monetary donation, you must be of legal age and have possession of the property subject to donation. For their part, the Donee who receives the donation must demonstrate that they fully understand the act being carried out, that is, that they have the appropriate mental capacities. Among the most common donations, we can distinguish donations of movable property (Money, shares, social participations or stocks, vehicles) and donations of immovable property (An apartment, a plot of land)  

Is it necessary to execute a notarial deed for a monetary donation?

  Donations of immovable property must be executed in a public deed, which will allow the registration of the donated property in the name of the Donee in the land registry.   Regarding movable property, it is not always necessary to execute a public deed. In the case of monetary donations, they can be carried out in a private document with the subsequent submission to the tax authorities of the payment of the tax. It would be advisable to execute a public deed in order to benefit from the existing tax rebates in the different Autonomous Communities.   In other examples such as a movable asset of significant value (Jewelry, works of art) it will not be necessary to go to a notary and the donation could be carried out through a private document. By executing a donation deed at the notary, we ensure greater legal security.   

What documentation is required at the notary to execute a donation deed?

 

Donations of immovable property:

  • National ID card of all parties involved and marital status.
  • Foreign resident ID (NIE) if not resident in Spain
  • Family book of the Donor.
  • Deed of ownership of the property being donated or, alternatively, a simple note
  • Habitation certificate.
  • Energy efficiency certificate.
  • Receipt for the payment of the property tax (I.B.I).
  • Certificate of being up to date with community expenses.
  • If the property has a mortgage charge, it will be necessary to provide the certificate of zero debt or pending debt.
 

Monetary donation:

  • National ID card of all parties involved and marital status.
  • Foreign resident ID (NIE) if not resident in Spain
  • Family book of the Donor.
  • Bank check or proof of transfer of the donated money.
  • In the deed, the origin of the donated funds must be established.
 

Donations of shares or social participations:

  • Title deeds of the Donors.
  • National ID card of all parties involved and marital status.
  • Foreign resident ID (NIE) if not resident in Spain
  • Articles of incorporation of the company transferring the shares or participations, as well as the
  • documentation related to its registration in the Commercial Registry.
  • Tax identification number (CIF) of the company.
 

How is the donation taxed and its particularities?

  The settlement of the donation tax will be based on the autonomous community of residence of the Donee, residence is considered the place where they have resided in the last 5 years. The model for settling the donation tax is 651. In the event that the place of residence is abroad, the tax must be settled with the state tax agency. We must bear in mind that if it is a donation of immovable property, the tax will be settled based on the autonomous community where the property is located. Each autonomous community has different tax rates for this act. Among the particularities of the donation of immovable property, we must consider that the tax on the increase in value of urban land, known as municipal capital gain, must be settled. In this case, the taxable person is the Donee. If the donation generates a capital gain for the Donor due to the difference between the acquisition value of the donated property and the value assigned in the donation deed, taxation for such gain must be carried out in their corresponding income tax return (IRPF) for the year.
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