Gifts from parents to children in Spain: how to make them
Deed, gift tax, personal income tax (IRPF) and effects on the inheritance. We put you in touch with an English-speaking specialist lawyer before you sign.
Gifts from parents to children: how to get them right
Handing over part of the inheritance, helping a child to buy a home or passing on the family business: gifts from parents to children have civil and tax consequences that are worth knowing before you sign.
01
How a gift is formalised
Property: a public deed (escritura) before a notary, with the child’s acceptance, and registration at the Land Registry (Registro de la Propiedad).
Company shares or a business: their own formalities and, sometimes, reductions for family businesses.
02
Gift and inheritance: bringing the gift into account
What is given in your lifetime is brought into account (colación) as a general rule: it counts as an advance and is deducted from what that child inherits, unless expressly waived. If it infringes another child’s forced heirship share (legítima), it can be reduced as excessive (inoficiosa). More in how an inheritance is divided by law.
03
Gift with a retained life interest
A common formula is to give the bare ownership (nuda propiedad) and retain the life interest (usufructo): the children are already owners and the parents go on living in the house or collecting the rent for life. It has tax costs for both sides, which a specialist inheritance lawyer calculates beforehand.
04
Other gifts between family members
Gifts from children to parents usually receive similar tax treatment in many regions; gifts between siblings or to other relatives, far fewer reliefs. A gift is, in principle, irrevocable. Compare it with leaving the asset in your will and, if there are assets abroad, look at international inheritances.
Taxes
What taxes are paid on a gift
A gift is not taxed under a single tax, and it is not always the same person who pays. See them side by side.
01
Gift tax (Impuesto sobre Donaciones)
It is filed within 30 working days. Several regions give a relief of up to 99% to children and spouses; others, much less.
Who pays it
The child who receives the gift.
02
Personal income tax (IRPF)
They may pay tax on the capital gain if the property is worth more than when they bought it; there is no “plusvalía del muerto” (the rule under which gains are not taxed on death).
Who pays it
The parents who make the gift.
03
Plusvalía municipal
This municipal capital gains tax is paid if urban property is gifted.
Who pays it
The child who receives it.
Property: the region where it is located is the one that counts. Money and other assets: in general, the region where the child lives.
Tax deadline
30 working days to declare the gift
They are counted from the signing. Tell us about your case before you make the gift and a specialist lawyer will calculate the cost under your region's rules.
A property, money or a business, and to whom: the basics are enough for us.
02
02A specialist
A specialist lawyer looks into it
A bar-registered lawyer specialising in inheritance and gifts reviews your case and contacts you.
03
03No obligation
You decide with all the information
You know the options, the taxes and the quote before you sign anything.
No-obligation enquiry
Planning to make a gift?
Tell us what you want to give and to whom: a specialist lawyer will review the deed and the taxes before you sign.
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Frequently asked questions
Questions about gifts from parents to children
How much can a parent give a child without paying tax?
There is no common tax-free amount: it depends on the region (autonomous community). Several give a relief of up to 99% to children and spouses. Even if there is little or nothing to pay, the tax return has to be filed.
Is it better to give in your lifetime or to leave it as an inheritance?
It depends. With an inheritance, the increase in value is not taxed under personal income tax (IRPF) and in many regions the reductions are greater; a gift lets you help now. It is worth comparing them with figures.
What is a gift with a retained life interest?
The parents give the bare ownership (nuda propiedad) and keep the life interest (usufructo): they go on using the asset or collecting its income for life. On their death, the child becomes the full owner.
Can I give my child money to buy their home?
Yes. Several regions have specific advantages, with requirements such as formalising it before a notary, recording what it is for and buying the home within a set period. Check before the transfer.
Does the gift count later in the inheritance?
Yes. As a general rule it is brought into account (colación) and deducted from what the child inherits, unless expressly waived, and it counts when calculating the other children's forced heirship shares (legítimas).
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