Carlos Baos – Tax Resident in Spain

Gifts received abroad and the Spanish Tax Office. Know your obligations as a tax resident in Spain.

This week, we turn our focus into the necessity of declaring before the Spanish authorities, gifts received abroad. Is it compulsory in all cases? Does it make a difference whether the donation is a sum of money or a piece of real estate?

Let’s start from the beginning: Tax residents in Spain (regardless of whether they are Spanish nationals or foreigners who have established their residence in Spain) have the obligation to declare in Spain all the assets they receive. Both in inheritances and gifts. Many people have the false belief that this is not necessary. Some even think that the Spanish Agency may never find out. Such thinking can be dangerous and is highly inadvisable from a legal point of view.

How much Gift Tax is payable by the person receiving the gift?

It will depend on two factors:

• The value of the goods donated (the higher the value of the gift, the higher the tax)
• The place of residence of the donee (that will determine the applicable law).

Currently, gifts in the Valencia region benefit from significant tax relief. Before the end of the year a radical change in the Gift Tax law will be definitely approved introducing a 99% rebate for donations from parents to children, from children to parents, between the spouses, etc. Once in force, Gift Tax in the Valencia Region will be virtually gone.

What do I need to consider before receiving the donation?

In Spain, when it comes to gifts and its taxation, it is necessary to comply with a series of requirements. In the Valencia Region the donation must be made before a Notary, there is a period of one month to declare the tax, etc. If you are going to receive a gift abroad that you will subsequently declare before the Spanish authorities, it is important to receive expert legal advice to ensure compliance and steer clear of possible challenges. Sometimes, the gift can be declared before a Spanish Notary (for instance, when gifting a sum of money). Others it may be possible that the gift is formalised before a Notary of your country. Each case must be studied in depth.

At White-Baos Lawyers we are experts in matters related to Inheritance and Gift Tax, and we stand ready to assist you. If you anticipate making or receiving a gift, and need guidance on declaring it in Spain, feel free to reach out to us. We’ll assess your case and provide expert legal advice.

You may be interested in the following services and articles:

Double taxation in inheritance tax. If you inherit abroad and are a tax resident in Spain. Do not pay inheritance tax twice..

Advice on Gift and Inheritance Tax in Spain. Making several gifts. Accumulation of gifts. Tax advice..

Foreigners in Spain: Giving a Spanish property to children or family..

Carlos Baos (Lawyer)

White & Baos.

Tel: +34 966 426 185

E-mail: info@white-baos.com

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