Complete Donation Guide: Legal Limits and Tax Conditions You Must Know
A donation is a voluntary transfer of assets or money from one person (donor) to another (donee) without expecting anything in return. This legal act must meet specific conditions and limits to be considered valid.
Types of Donations
Movable Property Donations
- Can be made verbally or in writing
- Property must be delivered immediately for verbal donations
- Includes items that can be easily transported
Real Estate Donations
- Must be executed before a notary with a public deed
- Donor can retain usufruct rights
- Involves immovable property like land or buildings
Donation Limits
- Current Assets Only
- Donors can only give existing assets
- Future assets cannot be included in donations
- Financial Security
- Donor must retain enough assets for living expenses
- Cannot donate all assets
- Debt Considerations
- Must keep sufficient assets to cover existing debts
- Donations that defraud creditors can be revoked through Paulian action
- Legal Inheritance Limits
- Cannot exceed testamentary limits
- Joint donations must be divided equally unless specified
Tax Implications
For Recipients:
- Subject to inheritance/donation tax
- May need to pay personal income tax in specific cases
- Municipal capital gains tax may apply for real estate
Special Considerations:
- Primary residence donations to persons over 65
- Properties owned less than 1 year
- Usufruct retention cases
Key Terms
Usufruct: Right to use and enjoy property while someone else owns it Public Deed: Official notarial document recording legal acts Paulian Action: Legal process for creditors to revoke fraudulent donations Municipal Capital Gains: Local tax on urban property value increases
Benefits of Lifetime Donations vs. Inheritance
- Better tax planning opportunities
- Immediate transfer of assets
- Potential retention of usage rights
- Clear division of assets during lifetime
A well-planned donation can be an effective way to transfer assets while minimizing tax implications and ensuring legal compliance. Consider consulting with legal and tax professionals before making significant donations.
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