Everything about the elimination of the Inheritance and Donation Tax in the Valencian Community

The Valencian Parliament has already approved the 99% reduction of Inheritance and Donation Tax in Valencia with retroactive effect from 28 May 2023. It will be applied for the benefit of children, spouses, and parents.
Inheritance and Donation Tax is a tax applied at autonomous community level in Spain, which means that each Autonomous Community can regulate it and set its own rates and exemptions.

In recent years, some Autonomous Communities have approved different measures to reduce or “eliminate” this tax in certain situations.

According to the Generalitat Valenciana, a “reduction of 99% of the tax rate has been approved for mortis causa acquisitions and payments of amounts obtained by beneficiaries of life insurance that are added to the estate by relatives of the deceased belonging to groups I and II (children, grandchildren, parents, spouses…) of Law 29/1987 on Inheritance and Donation Tax”.

We are talking about a measure that benefits retroactively from 28 May 2023 (to consider there is a limit of 6 months to settle this tax, so the deadline to approve this modification and that it could have retroactive effects to that date ends on 28 November. This measure has been approved before 28 November so that the beneficiaries of an inheritance from 28 May onwards do not have to pay this tax).

Secondly, we also find an important novelty: a benefit is introduced for acquisitions by donation or other inter vivos lucrative acts celebrated in favour of the spouse, fathers, mothers, adoptive parents, sons, and daughters or adopted children of the donor, grandsons or granddaughters and grandfathers or grandmothers. What is the purpose of this novelty? To simplify the current regulation of the reductions associated with kinship and incorporating the donor’s spouses as beneficiaries.