In economic terms the word donation is defined by article 618 of the Civil Code and following. The civil code establishes that a donation is an act by which someone freely gives away something in favor of another person who accepts it. A donation is a two-way legal business. In which the donor or person who grants and the donee who is the one who accepts the delivery participate.
In this type of legal business, despite the existence of a bilaterality, it is understood that the donation contract is a unilateral contract. Because only the donor is obliged, in this case, to make the delivery. Whereas the donee's role is simply limited to acceptance. The act of donation therefore supposes a decrease in the donor's assets. As well as, an increase in the assets of the donee.
Based on the concept of donation established by the civil code, it can be understood that a donation is an act or document celebrated between two or more people. The donor or person who grants has a part of her patrimony and gives it to the other party for free. That the donation is made for free does not mean that it is not subject to the payment of some type of settlement or impuesto.
Types of donations
We can distinguish two types of donations. The inter vivos donation and the mortis causa donation.
- Inter Vivos Donation: This type of donation is made while the donor is alive. It is the donation understood as such.
- Mortis Causa Donation: This type of donation can be made at any time. The difference with inter vivos donation is that it does not take effect until the death of the donor. The donation mortis causa is subject to the provisions for successions or bequests.
Inheritance tax and donations