Protected heritage of a person with a disability: what is it and how to establish it?

I come to talk about a resource that very few families that have a member with a disability know about. THE PROTECTED HERITAGE.
I will try to explain it in the simplest way possible.
First of all, know that a protected heritage can only be established for people with disabilities affected by the following degrees:

• People affected by a mental disability equal to or greater than 33%

• Those affected by a physical or sensory disability equal to or greater than 66%

The law that regulates law 41/2003, of November 18 https://www.boe.es/buscar/act.php?id=BOE-A-2003-21053

Your only short-term benefit is THE REDUCTION OF THE TAX BURDEN, so not everyone is interested, and unfortunately, it is more beneficial for high incomes than for low incomes. In the long term, if unfortunately said person with a disability was not able to manage their accounts independently, their legal guardian would have to prove each and every one of the expenses that were carried out in that protected estate.

In the long term, the person with a disability will have assets that must be managed by the legal guardian.
According to the Tax Agency: “The contributions made, which may be monetary or non-monetary, will give the right to reduce the tax base of the contributor, with a maximum limit of 10,000 euros per year. The set of reductions made by all the people who make contributions in favor of the same protected heritage may not exceed 24,250 euros per year. Where appropriate, when there are several contributions to the same protected assets and the limit of 24,250 euros is exceeded, the reduction must be made in proportion to the amount of said contributions. When the contributions exceed the established limits or in those cases in which the reduction is not appropriate due to insufficient tax base, there will be a right to reduction in the following four tax periods, until the maximum reduction amounts are exhausted in each of them. In the event of concurrence, the reduction from previous years will be applied first.

The question is: how does it affect me?

When the contributors are natural persons, will be considered as work income up to the amount of 10,000 euros per year for each contributor and 24,250 euros per year as a whole. In other words, if, for example, you earn €25,000 per year, and you contribute €5,000 to the protected heritage, you will declare €20,000 in personal income tax for that year (later I will comment on the tax benefit in numbers) contributors are taxable of Corporation Tax, will be considered income from work provided that they have been a deductible expense in Corporation Tax, with a limit of 10,000 euros per year. This limit is independent of the previous ones.
You can contribute both money and assets (stocks, investment funds, flats, premises...) so it cannot be transferred in the following 4 years, since, if not, it should be regularized.

Who can make contributions to this protected heritage?

People who have a direct or collateral line of kinship relationship up to the third degree inclusive with the person with disabilities. The spouse of the person with disabilities. Those who were in their care under guardianship or foster care.

How should we set it up?

I will tell you my own experience. In my case, my son has a mental disability of 33 % (has ASD) and the first thing I did was open an account AS THE SOLE HOLDER so that the person who wants to make contributions to the protected heritage can make the transfer with the concept “contribution to the protected heritage ”The second thing is to grant a public deed before a notary. It is necessary DNI, family book, disability certificate, DNI of those who contribute, account certificate and proof of transfer. In the case of Aragón (he did not specify if in other communities) the notary informed me that we had to present form 600, since it could be considered a “disguised donation”
Once the PROTECTED HERITAGE has been constituted, that money can be used to allocate it to the "vital needs" of the person with a disability, this includes medical and educational expenses, and they must always be accredited by means of an invoice. In case there was an inspection.
In January of the following year, the Treasury must be informed, completing form 182.
In our case, we have asked all the centers where we do therapy to transfer the receipts to that account, from now on we will pay all the supplements from that account.
Making approximate calculations, for a person with an individual income of €25,000, contributing €10,000 to the protected estate would have a tax saving of €1,600, and for a person with income of €40,000, €3,500. (This is what I was referring to when I said that unfortunately it benefits higher incomes more than low incomes) This may vary according to personal conditions, number of children...)

For this reason, if you are encouraged to constitute the protected heritage, I recommend that the contribution be made by the person with the highest income, as long as what they earn less than what they contribute continues to exceed the income of the spouse-partner. I also advise making the contribution all at once, instead of monthly, since the cost of the notary is based on the pages that he has to grant in public deed. The notary cost us €220.

I hope it been usefull!

Virginia Economist and mother of a child Tea

virgi_cello@hotmail.com