Inheritance and Gift Tax: Administration Deadlines and Procedures

Is the Administration's Action Correct?

According to Article 31.1 of Law 29/1987, of December 18, regarding the Inheritance and Gift Tax: "Taxpayers shall be obliged to file a tax return, inclusive of the taxable events referred to in this Act, at such times and in the manner set by regulation. Notwithstanding the foregoing, they may choose to submit a self-assessment, in which case they must perform the operations necessary to determine the amount of tax debts and accompany the document or statement which contains or reflects the taxable event."

Managing this tribute is initiated by declaration. Article 129.1 of the LGT states: "The tax authorities should notify the settlement within six months from the day after the deadline for filing or from the day following the date the management procedure is initiated in the case referred to in paragraph 2 of the preceding article. In the event of untimely submission of statements, the six-month period to notify the award shall commence to run from the day after the presentation of the statement."

Therefore, in the case of a belated statement, the deadline to notify the settlement would continue until May 24, 2010. Taking into account that the notification of assessment was carried out on June 10, 2010, the Administration's action is not correct.

Scenario: Victor's Tax Statement

Suppose that Victor made the statement on January 5, 2006; what term would the tax administration have to issue a provisional settlement without causing the revocation of the procedure?

Given that the statement was made within the prescribed time, we must address the first point made in Article 129.1 of the LGT: "The tax authority shall notify the settlement within six months from the day following the end of the deadline to file..." Thus, the time available to issue a provisional liquidation would last until August 9, 2006.

Revocation and Re-issuance

Imagine that the revocation has occurred; could the Tax Administration issue a provisional statement and notify Victor, for example, on March 10, 2007?

LGT Article 128.2 states that "the tax authorities may start again this procedure for the settlement of the tax within the limitation period when the proceedings brought by a declaration would have ended by forfeiture."

This is determined by the limitation period, which, according to Article 66.a) and Article 67.1 of the LGT, shall be four years from the day following the date of expiry of the statutory deadline for filing the appropriate statement. The limitation period is therefore extended until August 10, 2010. Yes, the Administration can therefore make a provisional settlement notice on March 10, 2007.