Tax news: How the new Supreme Court rulings affect family business donations

The recent Supreme Court rulings introduce a new approach to the taxation of family business donations, clarifying a previously uncertain scenario. Emma S. Corretger, partner at CIM Tax & Legal, analyzes the key aspects of this resolution in an article published by Expansión, authored by David Casals.

Key Changes in the Tax Treatment of Donations

Family businesses can benefit from significant tax advantages: up to 100% on Wealth Tax and up to 95% on Inheritance and Gift Tax, provided certain requirements are met, such as a family member holding a managerial role and the business being their primary source of income.

Previously, there was confusion regarding the period to consider for proving that the business was the main source of income. While Inheritance Tax assessed the current year until the date of death, Gift Tax considered the previous tax year before the transfer. The new ruling aligns both criteria under the current year until the tax accrual date.

Recommendations in Light of This New Scenario

Emma S. Corretger advises against making donations at the beginning of the year, as this period could present additional complications. She recommends thoroughly analyzing and planning any donation to ensure compliance with the necessary requirements to access tax benefits.

Read the full article for all the details on Expansión.com.

At CIM Tax & Legal, we express our gratitude to Expansión for their trust in our team and for the opportunity to bring clarity to matters of great importance for family businesses.