8.4.5. Reductions for contributions to protected assets of people with disabilities

Act 41/2003, of 18 November, on the protection of the assets of people with disabilities, has established a specific regulation for the assets of people with disabilities, whose immediate purpose is to create a wealth of assets aimed at satisfying the vital needs of a person with disabilities. The Act encourages the incorporation of this assets and the free contribution of assets and rights to it, establishing a series of tax measures for both the holder of the protected assets and for the contributors for the contributions they make.

Beneficiaries of the protected assets

1. The protected assets of persons with disabilities will be exclusively for the beneficiary of the person in whose interest they are established, who will be their holder.

2. For the purposes of this law, only persons with disabilities will be considered:

   • Those affected by a mental disability of 33% or more.

   • Those affected by a physical or sensory disability of 65% or more.

Contributions to protected assets of persons with disabilities will give the right to reduce the taxable base with the following conditions:

1. The taxable base will reduce contributions made by people with disabilities who have a direct or collateral relationship with them up to the third degree, including the spouse of the person with disabilities or those caring for them or foster care, with a maximum limit of 10,000 euros per year for each contributor and for all protected assets to which they make contributions.

2. The total of the reductions made by all persons making contributions in favour of the same protected assets may not exceed 24,250 euros per year. When several contributions are made in favour of the same protected assets, the reductions corresponding to these contributions must be reduced proportionally.

3. The positive amount of the general taxable base of the contributor once the applicable reductions have been made.

Important :Under no circumstances will the contributions made by the taxpayer with a disability who owns the protected assets be eligible for reduction.

Non-monetary contributions

When the contributions are non-cash, the amount of the contribution will be taken as the result of the provisions of article 18 of the Act 49/2002, of 23 December, on the tax regime of non-profit organisations and on the fiscal incentives for patronage.

Contributions of elements used for the activity carried out by taxpayers for Personal Income Tax that obtain earnings from economic activities will not be eligible for the reduction.

Excess contributions made and not reduced

1. Contributions that exceed the limits set out in the previous section will give the right to reduce the taxable base of the following four tax periods, until the maximum reduction amounts are exhausted, if applicable.

2. Contributions that cannot be reduced due to insufficient taxable income may be reduced in the following four tax periods.

3. When reductions in the gross tax base for contributions made in the financial year with reductions in previous years pending application are made in the same tax period, the reductions from previous years will be applied in the first place, until the maximum reduction amounts are exhausted.

Disposal of assets or rights contributed to protected assets 

The provision in the tax period in which the contribution is made or in the following four of any good or right provided to the protected assets of the person with disabilities will determine the following tax obligations:

A) If the contributor was a taxpayer of Personal Income Tax, it must replace the reductions in the taxable amount unduly carried out by filing the appropriate complementary self-assessment with the inclusion of late payment interest, within the period between the date in which the provision and the end of the regulatory period for the tax return corresponding to the tax period in which this provision is made.

B) The holder of the protected assets that the contribution received must include the part of the contribution received that has ceased to be included in the tax period in which the contribution was received as a result of the application of the provisions of Article 7 (w) of the law, by submitting the appropriate supplementary self-assessment, plus any applicable late payment interest, within the period between the date on which the provision and the end of the regulatory period for filing the tax return corresponding to the tax period in which this provision is made.

In cases where the contribution has been made to the protected assets of the relatives, spouses or persons in charge of the workers in the regime of guardianship or fostering, as referred to in paragraph 1 of this article, by a taxable person of Corporation Tax, the obligation described in the previous paragraph must be fulfilled by that worker.

The use of money and the use of movable property included in the protected assets will not be considered as acts of advance provision, when they are made to meet the vital needs of the beneficiary.

However, in order for this conclusion to be possible, since the tax benefits are linked to the effective constitution of a capital stock, it must be established the latter, which means that, except in exceptional circumstances where the person with a disability may be in a timely manner, the cost of money or fungigible assets before the last four years since their contribution must not prevent the constitution and maintenance during the time of the aforementioned protected assets.

For the purposes set out in this section, in the case of homogeneous goods or rights, it will be understood that the contributions made were made in the first place.

In the event of the death of the holder of the protected assets, the contributor or the workers referred to in section 2 of the article 43 of the revised text of the Corporation Tax Act, the provisions of points (a) and (b) of this section shall not apply.

Completion

A data capture window will open where the following data must be indicated: 

• Tax ID number of the holder with a disability of the protected assets to which the contributions have been made.

• Excesses pending reduction from 2015 to 2018.

  Taxpayers who have requested in these tax returns to be able to reduce the excess in the following four years will state in this box the amount that, pending application for this item, should be applied in the 2019 tax return.

• Contributions made in 2019 to the protected assets of the person with disabilities.

• Set of contributions, and excesses pending reduction, of all the contributions to the same protected assets, with the right to be reduced in 2019, when they exceed 24,250 euros per year. 

• The programme will transfer the contributions and contributions not applied to the corresponding section of Annex C.3

• To complete the last section correctly, take into account the following examples:

  1. Two taxpayers make contributions to their child's protected assets, for 15,000 each. The box must not be filled in since the total amount entitled to be reduced in the year is less than 20,000 euros (10,000 euros per taxpayer). 24.520

  2. Three taxpayers make contributions to the protected assets of a family member. Each of them contributes 15,000 euros. Yes, this box must be filled in because the total amount with the right to be reduced is 30,000 euros (10,000 euros per taxpayer) and is more than 24,520 euros. The amount of 30,000 euros must be entered in the box.