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A query was raised regarding whether the donation of shares in a commercial entity to nephews and nieces allows for the 95% reduction in Inheritance and Gift Tax. The Directorate General of Taxes (DGT) ruled that for donations (inter vivos transfers), the reduction applies only to spouses, descendants, or adoptees, thereby excluding nephews and nieces.
The ruling clarifies that nephews and nieces do not qualify for the significant 95% tax reduction in gift tax scenarios, limiting the tax benefits to immediate family members.
The tax team reviews your specific situation.
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