March 2024 tax newsletter

We started 2024 with a significant tax measure in terms of high net worth individuals, which is none other than extension of the Temporary Solidarity Tax on High Net Worth Individuals (ISGF) until asset taxation is reviewed in the context of a reform of the autonomous community financing system.

Thus, as expected, the ISGF that was “born” as a temporary tax for the 2022 and 2023 fiscal years has been extended indefinitely until the review or reform of the autonomous community financing system takes place.

Therefore, those who fall within the scope of this tax must bear in mind that, at the moment, it is a tax that will need to be lived with for some time, so they must consider it carefully when structuring and organizing their estate and income generation.

It should also be noted that the autonomous communities of Andalusia and Madrid, which had a 100% tax relief on the Wealth Tax payment, have restored the tax while the ISGF is in force, in order to collect the Wealth Tax that will be collected by the State Tax Authority if the tax relief continues.

We would also like to highlight that at the end of 2023 and the beginning of 2024, some autonomous communities established tax relief for Inheritance and Gifting Tax on inheritance and gifts between closer relatives.

Jesús Muñoz García

Director of Asset Planning

BBVA Private Banking

The most relevant new developments include the following:

• Restoration of Wealth Tax in the autonomous communities of Andalusia and Madrid, the increase of the tax-free threshold by the communities of Aragón, Balearic Islands and Murcia, as well as the establishment of 100% tax relief on the total tax payable in Cantabria.
• With regard to Inheritance and Gifting Tax, the establishment of 50% tax relief in the Community of Cantabria for inheritance in favor of brothers and sisters, and in the Community of La Rioja, 99% tax relief applicable to inheritances and gifts to spouses, ascendants and descendants.