{"id":246866,"date":"2025-07-03T11:15:22","date_gmt":"2025-07-03T09:15:22","guid":{"rendered":"https:\/\/www.godiaasesores.com\/madrid-extends-tax-relief-on-inheritance-and-gifts-law-2-2025\/"},"modified":"2025-11-06T09:55:42","modified_gmt":"2025-11-06T08:55:42","slug":"madrid-extends-tax-relief-on-inheritance-and-gifts-law-2-2025","status":"publish","type":"post","link":"https:\/\/www.godiaasesores.com\/en\/madrid-extends-tax-relief-on-inheritance-and-gifts-law-2-2025\/","title":{"rendered":"Madrid Extends Tax Relief on Inheritance and Gifts (Law 2\/2025)"},"content":{"rendered":"<h6>By Mar\u00eda Jos\u00e9 Garc\u00eda Garc\u00eda, Attorney at Law, Tax Area.<\/h6>\n\n<p class=\"wp-block-paragraph\">On July 1, 2025, <strong>Law 2\/2025, of June 25<\/strong>, came into force, amending the consolidated text of the legal provisions of the Community of Madrid regarding taxes ceded by the State. The regulation, published in the Official Gazette of the Community of Madrid on June 27, represents a significant extension of <strong>tax relief on inheritance and gifts<\/strong> in Madrid, especially in favor of <strong>relatives of Group III<\/strong>. <\/p>\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p class=\"wp-block-paragraph\">The <em>Official Gazette of the Community of Madrid<\/em>, published on June 27, can be consulted <a href=\"https:\/\/www.bocm.es\/boletin\/CM_Orden_BOCM\/2025\/06\/27\/BOCM-20250627-1.PDF\">here<\/a>.<\/p>\n<\/blockquote>\n\n<h2 class=\"wp-block-heading\">The 100% Reduction for Groups I and II is Maintained<\/h2>\n\n<p class=\"wp-block-paragraph\">The possibility of maintaining the <strong>100% reduction<\/strong> in the taxable base of donations is preserved, up to a <strong>maximum limit of 250,000 euros<\/strong>, when the following requirements are met:<\/p>\n\n<ul class=\"wp-block-list\">\n<li>The donee must belong to <strong>Groups I or II<\/strong> (ascendants, descendants, and collateral relatives of the first degree by consanguinity or affinity, including adoptive relatives).<\/li>\n\n\n\n<li>The donated amount must be used for:\n<ul class=\"wp-block-list\">\n<li>The <strong>acquisition of the donee&#8217;s habitual residence<\/strong>.<\/li>\n\n\n\n<li>The <strong>subscription of shares or social participations<\/strong> in processes of constitution or capital increase in commercial companies (S.A., S.L., cooperatives, etc.).<\/li>\n\n\n\n<li>The acquisition of <strong>goods or rights assigned to a business or professional activity<\/strong> of the donee, within twelve months following the donation.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n<h2 class=\"wp-block-heading\">Exemption from Public Deed for Amounts less than \u20ac10,000<\/h2>\n\n<p class=\"wp-block-paragraph\">As a novelty, it is established that <strong>a public deed will not be necessary<\/strong> to apply the reduction in donations <strong>less than 10,000 euros<\/strong>, unless there is an obligation of registration in a public registry.<\/p>\n\n<p class=\"wp-block-paragraph\">However, the reduction <strong>will not be applicable<\/strong> if the formalization in a public document occurs <strong>once the voluntary declaration period has ended.<\/strong><\/p>\n\n<h2 class=\"wp-block-heading\">Tax Relief on Inheritance and Gifts for Group III<\/h2>\n\n<p class=\"wp-block-paragraph\">The <strong>tax relief on the tax liability<\/strong> is extended to 50% for taxpayers in <strong>Group III<\/strong> according to article 20.2.a) of the Inheritance and Gift Tax Law.<\/p>\n\n<p class=\"wp-block-paragraph\">This group includes:<\/p>\n\n<ul class=\"wp-block-list\">\n<li>Siblings<\/li>\n\n\n\n<li>Uncles<\/li>\n\n\n\n<li>Nephews<\/li>\n\n\n\n<li>Sons-in-law and daughters-in-law (ascendants and descendants by affinity)<\/li>\n<\/ul>\n\n<p class=\"wp-block-paragraph\">This modification significantly improves the tax treatment of these transfers, significantly reducing the tax burden on non-direct relatives. In conjunction with other measures introduced by Law 2\/2025, this extension consolidates a clear policy of <strong>tax relief on inheritance and gifts in Madrid<\/strong>, aimed at facilitating the transmission of family assets during life or upon death. <\/p>\n\n<h2 class=\"wp-block-heading\">100% Tax Relief for Donations less than \u20ac1,000<\/h2>\n\n<p class=\"wp-block-paragraph\">A <strong>100% tax relief<\/strong> is introduced on donations made by natural persons, provided that the amount does not exceed <strong>1,000 euros<\/strong>, considering the total received from the same donor in the <strong>three previous years<\/strong>.<\/p>\n\n<p class=\"wp-block-paragraph\">In these cases:<\/p>\n\n<ul class=\"wp-block-list\">\n<li><strong>Self-assessment will not be mandatory<\/strong>, unless the operation must be registered in a public registry.<\/li>\n\n\n\n<li>If the limit of 1,000 euros accumulated in three years is exceeded, <strong>the tax relief will not be applicable<\/strong>.<\/li>\n<\/ul>\n\n<h2 class=\"wp-block-heading\">Regularization for Non-Compliance<\/h2>\n\n<p class=\"wp-block-paragraph\">In the event that the requirements to apply the tax benefits included in the regulation are not met, the taxpayer must submit a <strong>supplementary self-assessment<\/strong> within <strong>one month<\/strong> from when the non-compliance occurs.<\/p>\n\n<h2 class=\"wp-block-heading\">Conclusion: a Substantial Improvement in the Taxation of Lucrative Transfers.<\/h2>\n\n<p class=\"wp-block-paragraph\">Law 2\/2025 represents a <strong>significant advance in Madrid taxation<\/strong>, expanding access to tax relief on Inheritance and Gift Tax to groups that until now were penalized, such as siblings, uncles, or nephews. It also simplifies procedures in operations of smaller amounts, which may encourage the regularization of donations between individuals.<\/p>\n\n<h2 class=\"wp-block-heading\">How Can We Help You?<\/h2>\n\n<p class=\"wp-block-paragraph\">At <strong>Godia Asesores Tributarios<\/strong> we have a team specialized in <strong>estate taxation, inheritances and donations<\/strong>, helping you in:<\/p>\n\n<ul class=\"wp-block-list\">\n<li>Analyze your case and correctly apply the tax benefits.<\/li>\n\n\n\n<li>Plan operations in advance to optimize their tax treatment.<\/li>\n\n\n\n<li>Avoid errors that may lead to future regularizations.<\/li>\n<\/ul>\n\n<p class=\"wp-block-paragraph\"><strong><a href=\"https:\/\/www.godiaasesores.com\/en\/contact\/\">Contact us<\/a><\/strong> to receive comprehensive and personalized advice.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>By Mar\u00eda Jos\u00e9 Garc\u00eda Garc\u00eda, Attorney at Law, Tax Area. On July 1, 2025, Law 2\/2025, of June 25, came into force, amending the consolidated text of the legal provisions of the Community of Madrid regarding taxes ceded by the State. The regulation, published in the Official Gazette of the Community of Madrid on June [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":246867,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"off","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[85],"tags":[130,132,127,133,137,126,136,129,128,134,138,135,125,131],"class_list":["post-246866","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","tag-donations-between-relatives","tag-estate-planning","tag-gift-tax","tag-group-iii-inheritances","tag-inheritance-regulations-community-of-madrid","tag-inheritance-tax","tag-inheritance-taxation","tag-inheritances-in-madrid","tag-law-2-2025","tag-madrid-tax-reform","tag-siblings-uncles-nephews-donations","tag-tax-liability-reduction","tag-tax-relief-inheritance-and-gifts-madrid","tag-transfer-of-assets"],"yoast_head":"<!-- This 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