The time has come for your son to become independent and that is why he is thinking of buying his own home. However, there is not enough amount in your savings to meet the entrance of your new apartment and it is difficult for him to facilitate the granting of a mortgage to be able to pay what will be his house from now on. So, in these cases, can you help him by donating money.
An amount that can go towards the purchase of real estate or material, such as a car. In addition, for legal purposes, a donation is also a wedding gift to your child, buying him the car or the house, as well as leave shares or even an investment fund. Under this premise, below we explain everything related to the donation between relatives. That is, what differences exist with the loan, what taxes are paid or how this process is recorded for legal purposes.
Donation is not the same as loan
At this point it should be made clear from the outset that it is not a loan that is done between father and son to, for example, defray the cost of a new home.
In the latter case, a simile could be established with a mortgage that is requested from the bank. However, those who lend the money are you. Your child will receive it “delighted” knowing that, in addition, you will most likely “forgive” his interests and be more flexible when it comes to forcing him to return it to you.
Thus and in general lines, this loan is not linked to the payment of any type of tax (the donation does in some Autonomous Communities), but it does have the obligation that the donee give the money received as it can or has been stipulated.
A money that each year, in addition, can be included as part of the income statement. For that, when making these annual accounts, your child must justify, by means of written documents, that he has been making said economic reimbursement.
How is it the procedure?
The main difference, as you have seen, is that in this case Hacienda (@Haciendagob) intervenes for tax purposes. And it is that at the time of receiving the money disinterestedly, it must be declared before the authority that has the competence in each province; as well as proceed to the payment of the corresponding Inheritance tax and donations.
A lien that is different depending on the place of residence and that must be settled within a period maximum of 30 business days since the transfer was made. Something very likely, the latter, if it is a high amount since they will also ask you for a receipt where said economic transfer is registered.
When it comes to facing this extra cost, the regulations established in the Autonomous Community where the person resides (your child in this case) who is going to receive the money for free is applied. A payment that also depends on the amount to be awarded, as well as the family relationship Between the parts. Thus, in communities such as Andalusia or the Community of Madrid, the price to pay is merely symbolic since a 99% discount has been approved if certain familiarity requirements are met. An idea that is being pursued by the executive of Castilla y León since it is in parliamentary procedure to know if it is finally approved.
In the case of other regions, the payment can be 1.5% of the total contributed (counting from the first cent that is donated), such as the example of Álava.
That is why it is important to know how much will be overpaid at the time of registering said donation with the competent public entity. Once that is clear, it is necessary to go to the tax office that operates in each autonomous community so that it remains economic agreement registered established between the parties.
Registration for legal purposes
With differences in each case, the most normal thing is that they ask you to deliver a document (it can be done without being a request to use) where said donation is registered: the personal data of the donor, the amount donated and the identification data of the donee; as well as the date of the same. Information that must be completed in the official forms.
In addition, the justification of the transfer made, a photocopy of the DNI of each person involved in the act, as well as a piece of paper (the family book) indicating the kinship relationship between the two.
On some occasions, you may be forced to do this contract with the intermediation of a notary (who will also apply his fee). He will be the one to intervene to attest that the capacity requirements and content required by law for the person who will have the money from now on.
Once this is done they will ask you to do the payment of the tax corresponding in the associated banks to, later, also provide said payment letter already made. Only then will the donation be accepted for tax purposes.