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The alternative to donation to avoid paying taxes when giving money to a relative

Giving money to a relative at a specific time generally implies the tax payment. And it is that financially helping a family member without that amount being returned is considered in the eyes of the law as a donation.

Every time a donation is made, the Inheritance and Donation Tax must be paid. The autonomous communities are in charge of regulating the payment percentage, which depends on the amount to be donated and the degree of kinship of the recipient of the money.

In this sense, 7.6% is usually paid for amounts less than 8,000 euros and 34% for amounts greater than 200,000 euros. In between, other percentages are established that should be consulted in each community. Likewise, there are bonuses if the degree of kinship is very close, such as from parents to children. But, Is it possible to give money to relatives without having to pay taxes?

The loan between relatives

The alternative to donation that avoids taxes is known as a loan between relatives or loan between individuals. The operation is the same as that of a loan managed by a bank, but with an immense advantage: no interest is charged.

To formalize it, it is mandatory to draft a document in which the conditions of the same are specified: quantity, return period and people involved. Next, to notify the Treasury, fill in the Tax on Patrimonial Transmissions and Documented Legal Acts (AJD), which will not entail any cost. This tax has to be paid but nothing is paid for it.

Of course, both the person who lends the money and the recipient have to be very clear that money must be returned. In the event that this is not done and an attempt is made to disguise a donation as a loan, the Tax Agency could fine offenders with penalties of at least 50% of the amount.

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