Legal advice from Carlos Baos: Gratuitous contributions of privative assets

Legal advice from Carlos Baos: Gratuitous contributions of privative assets

Legal advice from Carlos Baos: Credit: Shutterstock

A ruling from the Spanish Supreme Court cleared up any doubt that might still be left. The gratuitous contributions of privative assets, made by one of the spouses, in favour of the conjugal society are not taxable. At least as far as the Tax of Donations (ID) and Tax of Onerous Patrimonial Transmissions and Documented Legal Acts (ITP-AJD) are concerned. We analyse the main reason below.

Contrary to common belief, the community of property between the spouses is not a partnership in which each spouse holds 50 per cent of the assets. The community of property or conjugal partnership is characterised by being a community of goods of Germanic character. As it has been remained by the ruling of the Supreme Court. What exactly does this mean? Primarily, that both spouses are owners, at the same time, of 100 per cent of the assets without either of them having any specific percentage or share in the assets.

This nuance is of vital importance. The ruling of the Supreme Court is based on this factor to nullify the interpretation of the Tax Office that would pretend these contributions to the partnership to be taxable. Why? Firstly, because according to any law, partnerships do not constitute a taxable person. Secondly, because when a spouse makes a contribution to the community of property, this contribution does not affect the privative sphere of the other spouse. It is integrated in the patrimony of the conjugal partnership, not in the private patrimony of the other spouse. For this reason, the transaction is not subject to either of the two taxes.

What happens with the Municipal Plusvalía? According to the law regulating local finances, it is not subject to this tax either. Does the ruling also apply to the Personal Income Tax? Although the judgement does not expressly mention this tax, in view of the above, it seems clear that its reasoning could also apply to the IRPF. In other words, there would be no capital gain, and these contributions should not be subjected to tax either.

If you want to know more about the taxation of contributions to the community property, please do not hesitate to contact us. We will study your case and give you expert advice to minimise your tax bill.

You may be interested in the following services and articles:

Economic matrimonial regime. Do I have any right over the properties bought by my spouse?

How to claim what was paid on the spouse or partner property in case of divorce or separation.

The importance of knowing your Matrimonial Property Regime. Post and Pre nuptial Agreements in Spain.

Carlos Baos (Lawyer)

White & Baos.

Tel: +34 966 426 185


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Written by

Carlos Baos (Lawyer)

Lawyer Carlos Baos has been advising on variety of expat-related legal issues for years and weekly column offers free weekly insights.