Donations from parents to children in Catalonia: taxed at 5% if formalised before a notary

The Inheritance and Donations Tax is devolved to the autonomous communities, so the tax cost varies by territory. In Catalonia, the first €200,000 is taxed at 5% if the transaction is formalised in a public deed.

Receiving a transfer from parents is not exempt income. The beneficiary, that is, the child receiving the money, is obliged to declare it and pay the Inheritance and Donations Tax. The parents, on the other hand, do not pay tax on this amount in their Income Tax. This is confirmed by lawyer Joana Marín, director of Bufete Marín Fonseca, and Àlex Ebrat from Ebrat Advocats, consulted by La Vanguardia.

The declaration is submitted using form 651. The general deadline in Catalonia is one month from the date of the donation. This month starts counting from the date the money is delivered, not when the recipient decides to regularise the situation. Therefore, delaying the process can incur penalties.

The amount to be paid depends on several factors: the autonomous community where the recipient resides, the amount received, the relationship, and how the transaction has been formalised. A simple bank transfer is not the same as a donation formalised in a public deed.

In Catalonia, there is a reduced rate for donations between parents and children. If formalised in a public deed, the first €200,000 of taxable base is taxed at 5%. The bracket between €200,000 and €600,000 is taxed at 7%, and above that amount, at 9%.

"The person who must declare it is the recipient, in this case the child, as they are the beneficiary of the donation," explains Marín.

The key is the notary. If the money has already been transferred before going to the notary, the reduced rate can still be applied as long as the transaction is formalised in a public deed within the stipulated time. Conversely, letting months pass and then trying to document it can result in losing a more favourable tax treatment.

Additionally, there are specific bonuses if the money is used to purchase the first main residence and legal requirements are met. In that case, the tax savings can be greater.

Experts recommend planning the donation before making the transfer. A family assistance of €50,000 can end up costing much more if declared late or without the proper formalisation. In Catalonia, the one-month deadline and the public deed make all the difference.