A Q&A guide to private client law in Spain.
The Q&A gives a high level overview of tax; tax residence; inheritance tax; buying property; wills and estate management; succession regimes; intestacy; trusts; co-ownership; familial relationships; minority and capacity, and proposals for reform.
To compare answers across multiple jurisdictions, visit the Private client Country Q&A tool.
The Q&A is part of the PLC multi-jurisdictional guide to private client law. For a full list of jurisdictional Q&As visit www.practicallaw.com/privateclient-mjg.
For individuals that are tax resident in Spain and subject to personal income tax (PIT), the official tax year runs from 1 January to 31 December. If a taxpayer dies before 31 December, the tax year ends and PIT accrues on the date of death. The period for filing PIT returns is, generally, from 3 May to 30 June of the following year.
In addition, wealth tax has been re-introduced in Spain for the tax periods 2011 to 2012 and, presumably, will be as well for 2013. However, some Spanish Autonomous Communities have approved certain tax benefits, including a 100% tax allowance for Madrid residents (see Question 11, Wealth taxes).
Generally, non-resident taxpayers that are subject to non-resident income tax (NRIT) must declare and pay NRIT during the first 20 days of April, July, October and January.
NRIT is paid on income obtained during the calendar quarter immediately preceding these payment periods. For example, NRIT on interest income earned on 20 May will be declared and paid during the first 20 days of July.
If a non-resident sells Spanish real estate, a NRIT return must be submitted during the three months following the transfer date.
For transactions with a taxable base at zero, the NRIT return must be submitted between 1 to 20 January of the year following the transaction year.
If a taxpayer is entitled to a tax refund, the return can be submitted from 1 February of the year following that in which the income accrued, and up to four years later.
Special rules apply for individuals not resident in Spain for tax purposes and operating through a Spanish permanent establishment (PE) (see Questions 5 and 6).
Spanish tax law does not differentiate between the concepts of domicile and residence to determine the tax status of residence. A taxpayer's domicile is one of the criteria used to determine where a taxpayer is resident.
A taxpayer's residence determines where a taxpayer must pay taxes and the applicable rules.
An individual is a taxpayer for PIT purposes if his habitual residence is in Spain.
Residence tends to be determined according to factual evidence. To be tax resident in Spain, an individual must either:
Spend more than 183 days in a calendar year in Spain. Sporadic absences are not excluded from the calculation of the 183 days, unless the taxpayer can prove that he is tax resident in another jurisdiction.
Have his main activity or economic interests directly or indirectly located in Spain.
In addition, unless the taxpayer proves otherwise, it will be assumed that he is tax resident in Spain if his spouse and minor children, who depend on the spouse, habitually reside in Spain.
Conventions for the avoidance of double taxation (CDT) include criteria to determine a taxpayer's tax residence. Where there is a conflict between signatory states' domestic laws concerning the state in which a taxpayer is tax resident, the CDT's criteria to determine tax residence should be considered to establish which state's tax legislation will be applied.
The PIT Law does not provide for an exit tax when an individual loses his tax residency status.
However, if under a special regime, there is any income pending to be included in an exiting individual's PIT base, this income must be included in the tax base of the last tax year when he was a Spanish tax resident (PIT Law).
An individual who stops being a Spanish tax resident must inform the Spanish tax authorities.
The PIT Law does not specifically regulate temporary residents. Tax liability depends on whether an individual qualifies as a tax resident under the PIT Law (see Question 2).
An individual who obtains Spanish-source taxable income but does not fulfil the requirements to be classified as tax resident is considered a non-resident and liable to pay NRIT (see Question 1). In this case, there are both a:
Special, optional regulation for EU-resident individuals who have obtained, in Spain, either labour income or income from an economic activity.
Lower tax rate for labour income obtained in Spain by individuals who are considered foreign seasonal workers.
The PIT Law includes a special tax regime for non-resident workers moving their domicile to Spain. These workers are taxed exclusively on their Spanish-source income and capital gains, as if they were non-resident individuals subject to NRIT. This applies subject to certain requirements and for no more than six calendar years. In particular, employment income is taxed at the reduced NRIT rate of 24% (24.75% for 2012 and 2013). Non-Spanish source income and capital gains are not subject to tax.
Individuals who are not resident in Spain for tax purposes or acting through a PE located in Spain are generally taxed under NRIT.
Generally, capital gains obtained in Spain by these individuals are taxed at a rate of 19% (21% for 2012 and 2013). Generally, no withholding tax is levied on capital gains (with the exception of redemption on collective investment undertakings and a 3% withholding tax levied on the consideration paid to a non-resident transferring real estate located in Spain).
Residents of jurisdictions that have concluded a CDT with Spain that includes an information exchange clause are exempt from capital gains tax under NRIT. This exemption only applies in relation to the following, in a Spanish official secondary securities market:
Transfers of shares.
Reimbursements of units in a collective investment undertaking.
Further, EU residents are entitled to an exemption for capital gains on the disposal of shares, provided that all of the following apply:
The assets of the company to which the shares belong do not consist mainly, directly or indirectly, of real estate located in Spain.
The individual has not held a participation interest of at least 25% in the Spanish company's share capital during the 12 months before the share transfer.
The capital gain is not obtained through a tax haven jurisdiction.
Most CDTs provide for an exemption from capital gains tax over NRIT, provided the assets:
Are not allocated to a PE of the non-resident in Spain.
Do not consist of real estate located in Spain.
In some cases, when the assets consist of shares in a Spanish-resident entity, the CDT exemption only applies if the shareholding is below significant participation thresholds (that is, below 15% or 25%).
Individuals who are not resident in Spain for tax purposes or acting through a PE in Spain are generally taxed under NRIT (see Question 5).
For these individuals, income obtained in Spain is generally taxed at 24% (24.75% in 2012 and 2013). However, a 19% (21% in 2012 and 2013) reduced tax rate applies to dividends, interest and capital gains.
Each income is taxed separately on its gross amount and no expenses are deductable (with certain exemptions). Normally, a withholding tax equal to the non-resident's final tax liability, other than most capital gains, is levied on the Spanish-source income.
Domestic rules provide certain tax exemptions on income obtained by non-residents for example, income derived from Spanish public debt or interest accrued on non-residents' bank accounts.
Further, individuals resident in the EU are entitled to an exemption on interest obtained in Spain, provided that the interest is not obtained through a tax haven jurisdiction.
Individuals resident in a jurisdiction which has entered into a CDT with Spain can apply the reduced tax rates provided in the relevant CDT (for example, CDTs usually establish rates ranging from 5% to 15% on interest and dividends).
Spanish inheritance and gift tax (Impuesto sobre Sucesiones y Donaciones) (IGT) is charged by the Spanish Autonomous Communities on an individual's acquisition of assets or rights by means of a gift or inheritance (that is, on a free basis).
In the case of mortis causa transfers (that is, gifts made during a donor's lifetime that take effect on death) the taxable amount attributed to each inheritor is the market value of the goods or rights received, reduced by the amount of any charges and liabilities assumed. IGT law establishes reductions depending on the inheritor's:
Age.
Relationship with the deceased.
In the case of gifts, the taxable amount is the market value of the gifts or rights, minus any charges and debts assumed.
The marginal tax rate is determined by the Autonomous Communities on the basis of the value of the assets received. Multiplying coefficients which apply on the tax due are determined by the:
Relationship between the acquirer and the donor or the deceased.
Acquirer's current net wealth.
IGT is not levied on acquisitions by non-resident legal entities (they are subject to the Spanish NRIT).
Tax rates are determined by the Autonomous Communities (see Question 7). As a general rule, rates range from 7.65% for transfers up to EUR7,993 (as at 1 October 2012, US$1 was about EUR0.8) to 34% for transfers exceeding EUR797,555.
The application of the multiplying coefficients (see Question 7) may increase the rate applied to a maximum of 81.6%.
The elimination of IGT is currently being discussed and analysed. Six of the 19 Autonomous Communities apply a 99% exemption on gifts and inheritances between ascendants (that is, ancestors, descendants and spouses). These Autonomous Communities are:
Madrid.
Valencia.
Castilla León.
Castilla-La Mancha (95%).
Catalonia.
Other Autonomous Communities, such as the Basque Country, the Canary Islands, Galicia, Balearic Islands and Aragon have approved important tax benefits for these kinds of gifts.
Under certain conditions, the mortis causa acquisition of a family business and the mortis causa acquisition of the deceased's principal residence benefit from a 95% tax credit of its total value. In both cases, exempt taxes will be due with late interest if the acquirer does not hold onto the inherited assets for at least five years (ten years in some Autonomous Communities).
The inter vivos (that is, a transfer made during one's lifetime) acquisition of the shares in a family business also benefits from a 95% tax credit of its total value if certain conditions are met.
Techniques to achieve a tax-efficient succession should be considered on a case-by-case basis.
IGT applies to non-resident individuals on the:
Acquisition of goods which are physically located in Spain or rights which can be exercised in Spain.
Receipt of amounts from an insurance policy entered into with a:
Spanish insurance company; or
foreign insurance company operating in Spain (if the policy was signed in Spain).
Spain has signed CDTs regarding IGT with:
Greece (6 March 1919).
France (8 January 1963).
Sweden (25 April 1963).
A capital gain arising on a lifetime gift of an asset located in Spain may be subject to NRIT, taxable on the owner of the transferred property.
The mortis causa or inter vivos transfer of urban real property located in Spain will also be subject to a municipality tax.
The acquisition of assets or property by a non-resident individual can be subject to Spanish indirect taxation.
The general rules applicable to sale and purchase transactions are as follows:
The standard 21% Spanish value added tax (VAT) applies on a transfer of assets or property in Spain (other than in the Canary Islands, Ceuta and Melilla, where alternative indirect tax rules apply) by:
a professional;
any person or entity which operates a business.
Where the transfer of assets or property located in Spain for consideration is not subject to VAT, 3% to 10% transfer tax applies. Transfer tax may also apply on certain real estate transactions which are subject to but exempt from VAT (unless the VAT exemption is waived under certain conditions).
In addition to VAT (if applicable), transactions which are not subject to transfer tax may be subject to 0.25% to 2% stamp duty if the relevant transaction is documented in a notary public deed registered in a public register. This is the case for deeds documenting, among others, the:
transfer of real estate; and
granting of mortgages.
Real estate ownership is subject to a local tax (Impuesto sobre bienes inmuebles) (IBI) by the local municipalities:
On an annual basis.
At 0.4% to 1.3% on the cadastral value of the relevant real estate.
In addition, non-resident entities (as opposed to individuals) which own Spanish real estate assets can be subject to a special annual 3% tax on the cadastral value of the relevant asset (with certain exemptions).
Wealth tax has been re-introduced in Spain for the tax periods 2011 and 2012 (see Question 1, Residents) and presumably for 2013 also for non-resident individuals, who are subject to a rate of 1% to 2.5% of the value of Spanish property. The first EUR700,000 of property value is tax exempt.
Non-resident individuals can use the following tax-advantageous property holding structures:
Spanish special purpose vehicles (SPVs). Spanish SPVs are frequently used to hold non-collective investments of non-resident individuals in Spanish real estate. These investments are acquired through SPVs located in a European jurisdiction (such as The Netherlands or the UK) to minimise Spanish capital gains tax. However, the tax authorities may challenge these structures when they are used solely for passive investments and lack economic substance.
Spanish real estate funds (sociedades de inversión inmobiliaria and fondos de inversión inmobiliaria). Collective investment by non-residents in Spanish real estate may be channelled through Spanish real estate funds, which are subject to a 1% corporate income tax (CIT). Capital gains and dividends derived by non-residents from real estate funds may be exempt or partially exempt from Spanish taxation.
Spanish real estate investment trusts (Sociedades Cotizadas de Inversión en el Mercado Inmobiliario) (REITs). REITs are subject to a 0% corporate income tax rate. Nevertheless, a special corporate income tax rate of 19% is applicable to the income distributed to shareholders holding at least a 5% of the capital of the REIT and subject to a tax less or equal to 10% for such income.
Spanish-resident individuals are subject to PIT, and wealth tax (for 2011, 2012 and presumably for 2013), on a worldwide basis. Generally, no tax distinction is made between Spanish assets and overseas assets.
There is a wide network of double tax treaties (that is, CDTs). As of September 2012, Spain had entered into 93 CDTs including with:
The UK.
The US.
France.
Germany.
Belgium.
Luxembourg.
Singapore.
Hong Kong.
There is no legal obligation to make a will. If no will has been made, a legal intestate succession regime applies.
A will that was executed in another jurisdiction, can be recognised in Spain (Article 11.1, Civil Code).
In relation to Spanish assets, for a will executed abroad to be enforced, it must be translated and legalised before a Spanish Consul or following the 1961 Hague Convention requirements. The authorities also require an inheritance tax declaration to carry out the change in title in the relevant registries (for example, the Land Registry when concerning real estate). Therefore, if there are a significant number of Spanish assets within the estate, it may be quicker and more cost effective to grant a will in Spain.
To determine which law applies to succession, the applicable law is the national law of the deceased at the time of his death (Article 9.8, Civil Code).
The provisions of international treaties on dual nationalities apply if an individual has dual nationality under Spanish law. If there is no applicable treaty, the nationality of the last place of habitual residence is preferred (or if this is not applicable, the last nationality acquired) (Article 9.8, Civil Code).
If the clear legal formalities for making a will in Spain are not observed, the will is void (Article 687, Civil Code).
The required formalities are different for each kind of will. Common wills can take the form of any of the following (Article 676, Civil Code):
Holographic will. A holographic will can only be made by persons who are of legal age (Article 688, Civil Code). A will is holographic if the testator writes it by hand (Article 678, Civil Code). To be valid, it must be:
complete;
signed by the testator; and
dated with the exact date on which it is made.
Open will. A will is open if the testator declares his last will in the presence of a notary public who is aware of the dispositions made (Article 679, Civil Code).
Closed will. A will is closed if the testator, without revealing his last will, declares that it is contained in the document presented to a notary public (Article 680, Civil Code).
Special wills are a different set of wills, but their use is rare.
Once the inheritance is attributed to and accepted by the beneficiaries, the specific assets become their property. Unless the testator has imposed specific conditions that the beneficiaries must fulfil, the beneficiaries can manage the assets as they choose.
The beneficiaries cannot modify testamentary dispositions if the will has not been implemented. However, the beneficiaries can agree on a specific interpretation of the will if the testamentary dispositions are unclear.
Wills which have been executed abroad are generally recognised in Spain, unless they are considered contrary to public order. For example, a foreign will can be enforced in Spain if a foreign ruling which establishes the will's validity is recognised by a Spanish court.
Foreign grants of probate duly legalised and translated into Spanish are recognised in Spain, provided that the law which regulates the succession allows them (Article 11.1, Civil Code).
The place of death by itself is irrelevant when considering the law applicable to the inheritance. However, Spanish tribunals are competent on succession matters if the last domicile of the deceased was located in Spain.
The estate is administered by the person appointed by the deceased. If no appointment is made, the estate is administered by the heirs. If there are pending court proceedings regarding the estate, an administrator can be appointed by the court.
The administrator acts as the representative of the estate and is obliged to preserve it and keep it in good condition. The administrator is empowered to act on behalf of the estate and obliged to periodically give an account of the estate's status and the profits obtained (if any).
The executor is in charge of executing the testator's intentions. If the testator has not specifically determined the executor's powers, the executor has the following powers (Article 902, Civil Code):
To decide on and pay for as provided by the will:
any religious services;
the testator's funeral.
In the absence of provisions to this effect, the executor can carry out a service and funeral according to local custom.
To pay legacies consisting of cash, with the heir's knowledge and approval.
To supervise the performance of all other mandates contained in the will, and to uphold the will's validity, both in and out of court.
To take the necessary precautions for the preservation and custody of the property, with the intervention of the heirs who are present.
The heirs are in charge of executing the testator's intentions if either (Article 911, Civil Code):
No executor has been appointed.
The appointed executor cannot perform his obligations.
Establishing title and gathering in assets (including any particular considerations for non-resident executors)?
Paying taxes?
Distributing?
Article 794 of the Civil Procedure Act determines how to compile the inventory of all the estate's assets. The court clerk, in co-operation with all those that may have an interest in the inheritance, compiles a list of all the assets that comprise the estate.
If a conflict arises over the inclusion or exclusion of assets in the inventory, the court clerk must summon those concerned to a hearing, which will follow what is set out in the oral proceedings. The judgment issued on the inclusion or exclusion of assets in the inventory will safeguard the rights of third parties (Article 794, Civil Procedure Act, paragraph 4).
The procedure for paying taxes is outlined below.
Beneficiaries of the will must present a declaration to the tax authorities of all assets of the estate which are being inherited. The declaration must include all relevant documents for example, will, description of assets, valuations and so on. If this obligation is not met, the transfer of title in the assets cannot be registered with the relevant public registry (Article 31, IGT).
The beneficiary can deduct all sums that have been paid under a similar tax in another jurisdiction in respect of the same assets (Article 32, IGT).
The beneficiaries must designate an accountant to divide the estate. If the parties cannot agree on an accountant, the court will appoint one (Article 782 et seq, Civil Procedure Act).
Once an accountant is appointed, he must (Article 786.1, Civil Procedure Act):
Carry out the division in accordance with the provisions in the law applicable to the succession of the testator. If the testator has established other rules for the inventory, evaluation, settlement and division of his assets, these are followed on the condition that they do not damage the legitimate proportions of the forced heirs.
Endeavour to prevent non-division or the excessive division of the property.
Present the proposal to the beneficiaries, which should include the evaluation of the assets along with their division and assignment to each of the parties.
All parties should agree on the proposed distribution of the assets so that it can be considered final. If an agreement is not reached, proceedings will commence for the court to determine the final division of the assets.
Once the division is finalised, the court clerk must hand over to each of the beneficiaries what has been adjudicated to them and their ownership entitlements. An actuary notes the adjudication (Article 788.1, Civil Procedure Act).
If Spanish law applies to an inheritance, the forced heirship regime applies to all assets of the estate, including those held outside Spain.
All those with a legitimate interest can challenge a will. Challenging a will always involves judicial proceedings.
The claimant can challenge the will through either an:
Annulment action, which renders the will invalid.
Action for a supplementary share (acción de suplemento), which increases the forced heir's share until the will complies with the provisions of the forced heirship regime.
In addition, all those who have a legitimate interest can challenge the executor's or administrator's decisions if they are deemed to be contrary to either the:
Provisions of the will.
Preservation of the estate.
The administrator is responsible for damages caused to the estate due to his own negligence or fault (Article 1031, Civil Code).
There is a forced heirship regime applicable throughout Spain (Articles 806 to 822, Civil Code). This does not apply to those who have either:
Their civil residence in certain Spanish territories or localities (for example, Navarre).
No material limitations to their testamentary dispositions.
The following qualify as forced heirs (Article 807, Civil Code):
Descendants, in respect of their parents and ascendants.
In the absence of the above, the ascendants, in respect of their descendants.
The widower or widow in the manner and to the extent set out in the Civil Code.
The Civil Code determines the shares of each of the forced heirs:
Descendants are attributed a forced share of two thirds of the estate (Article 808, Civil Code).
If no descendants exist, ascendants are attributed a forced share of half of the estate. If there is a living widow or widower, the share of the ascendants as forced heirs is reduced to one-third of the estate (Article 809, Civil Code).
Widows or widowers are a special type of forced heir. They are not entitled to the property of the estate's assets but rather to the usufruct of a share of the assets (that is, a life interest in the spouse's estate). This forced share attributed to a widow or widower varies:
if the descendants are forced heirs, the widow or widower is entitled to the usufruct of a share of one-third of the estate (Article 834, Civil Code);
if the ascendants are forced heirs, the widow or widower is entitled to the usufruct of a share of half of the estate (Article 387, Civil Code);
if no other forced heir exists, the widow or widower is entitled to the usufruct of a share of two thirds of the estate (Article 838, Civil Code).
Any testamentary disposition that does not comply with the legally established shares of the forced heirship regime is void. All gifts given by the deceased in life are considered when calculating the forced shares. They can be discounted to comply with the forced heirship regime and may have to be returned.
Only one-third of the estate can be freely distributed by the deceased through testamentary dispositions.
Spanish law does not recognise trusts, the typical purposes of which are achieved using other legal means. Trust assets are therefore considered regular assets of the estate and are taken into account to determine the share of the estate that should be attributed to forced heirs. If a trust violates the share of the estate which should be attributed to the forced heirs, it is deemed void under Spanish law, and claims can be brought against the trust assets.
It is not possible to avoid the forced heirship regime.
The forced heirship regime takes into account assets received by beneficiaries in any jurisdiction.
Forced heirship is a mandatory regime. Therefore, the forced heir cannot agree to a different distribution of the assets, even through an agreement with the testator during his lifetime.
Spanish law is based on the principle of unity of succession. Under this, the succession is subject to the laws of one jurisdiction, which will be the national law of the deceased at the time of his death (see Question 15).
If the deceased has multiple nationalities or no determined nationality, the law that applies to the succession is the national law of the deceased's last habitual residence (Article 9.9, Civil Code).
Spanish courts have exclusive jurisdiction over issues involving immovable property located in Spain and cannot refuse jurisdiction over these assets. In addition, the unity of the succession regime applies in Spain (see above).
There is a specific succession regime which applies to those who die intestate, to determine the estate's heirs. Intestate succession occurs in the following cases (Article 912, Civil Code):
When a person dies without making a will, or has made a will which is void or invalid.
When a will is incomplete.
Non-fulfilment of a condition imposed on the appointment of the heir.
When the appointed heir is incapable of succeeding.
In these cases the intestacy rules attribute the estate to the (Article 913, Civil Code):
Deceased's relatives.
Deceased's widower and widow.
State.
The order for succession is the following:
Descendants (Article 930, Civil Code).
Ascendants (Article 935, Civil Code).
Widow or widower (Article 944, Civil Code).
Siblings.
Other relatives up to the fourth degree (that is, cousins, great uncles and so on) (Article 954, Civil Code).
The state, if none of the above exists.
Generally, distant relatives do not inherit under the intestacy rules. Relatives of the same degree inherit in equal shares (Article 921, Civil Code).
When a person dies intestate, the establishment of heirs is made by either a notarial or judicial declaration taking into account the succession order (see Question 28). The notarial declaration is only available for descendants, ascendants and/or the surviving spouses. The judicial declaration is available for all heirs. Both declarations can be challenged following judicial proceedings.
Spanish law does not recognise trusts and there is no distinction between legal and beneficial ownership.
The Spanish tax authorities can disregard a trust structure and consider the related transfers, acquisitions and agreements to be directly between the settlor and the beneficiaries (criteria adopted by the Spanish General Tax Directorate and the Supreme Court's decision of 30 April 2008) (RJ 2008/2685). The relevant trust structure should be analysed on a case-by-case basis.
Spain has not ratified the HCCH Convention on the Law Applicable to Trusts and on their Recognition 1985 (Hague Trusts Convention).
According to international private law principles, Spain should recognise the legal effects of trusts that cover assets located outside Spain.
However, without specific Spanish regulations or case law on the legal effects of trusts in Spain, the approach that Spanish courts would take is uncertain (see Question 30).
Not applicable (see Question 30).
Does the law provide specifically for the creation of non-charitable purpose trusts?
Does the law restrict the perpetuity period within which gifts in trusts must vest, or the period during which income may be accumulated?
Can the trust document restrict the beneficiaries' rights to information about the trust?
Not applicable (see Question 30).
Not applicable (see Question 30).
Not applicable (see Question 30).
The Civil Code governs co-ownership of assets by individuals. The most relevant impact of these provisions is on the rules governing the community of joint assets regime (see Question 37, Matrimonial regimes).
There are three main matrimonial regimes:
Community of joint assets (Gananciales). Any gains or profits obtained during the marriage by either spouse are common to both spouses. If the marriage is dissolved, these assets are divided equally between the spouses (Article 1.344, Civil Code). All assets held by a spouse before the marriage, or acquired by way of inheritance, belong exclusively to that spouse.
Property separation regime (Separación de Bienes). The assets held by a spouse before the marriage, as well as any asset which they subsequently acquire, belongs to that spouse. In addition, each spouse shall have the right to the administration, enjoyment and free disposal of their property (Article 1.437, Civil Code).
Participation regime (Participación). Each spouse acquires a right to participate in the gains obtained by the other spouse during the time that the regime is in force (Article 1.411, Civil Code). Any increase in the value of each spouse's assets is distributed between the couple.
The spouses can choose which matrimonial regime will apply to their marriage (Articles 1.315 and 1.316, Civil Code). If no regime is chosen, the community of joint assets regime applies. However, this provision depends on the region and in Cataluña and the Balearic Islands for example, the property separation regime applies if the spouses have not chosen a specific regime.
12 of the 17 Spanish Autonomous Communities regulate the rights of cohabitees and civil partners.
Further, some courts have extended the post mortem rights (that is, forced heirship) derived from marriage to cohabitees and civil partners. If a couple is registered under these regulations, inheritance and gift tax applies in the same way as it would to a married couple. This interpretation can be avoided by clarifying in writing that the assets cannot be considered common to both cohabitees and partners.
Same-sex marriage has been valid since 2005 in Spain and has the same effects as heterosexual marriage (see Question 37, Matrimonial regimes). Same-sex married couples are treated for tax and succession purposes in the same way as heterosexual married couples.
Married?
Divorced?
Adopted?
Legitimate?
Civil partnership?
Marriage is a legal agreement between spouses who express the will to enter into a legally regulated union, which is intended to be stable throughout their lives. The only essential element for marriage is matrimonial consent (Article 45, Civil Code). However, specific persons cannot marry, including (Article 46, Civil Code):
Non-emancipated minors.
Persons who are already married.
Further, since 2005, same-sex marriage is valid in Spain and has the same effects as heterosexual marriage.
Divorce legally dissolves a marriage. It can only take place by way of a court judgment and it is effective from the time the judgment becomes final.
Adoption is a legal act which requires a judicial decision by means of which a person (generally a minor) is considered to be the legal son or daughter of another person.
Under Spanish law, there is no legal concept of a legitimate child. Spanish law recognises equal rights to all children, whether they were born in or out of wedlock.
There is not a legal definition for civil partnership (see Question 37).
A person is considered a minor until he is 18 years old (legal age). There are several limitations concerning minors, including:
A person who is not of legal age has limited legal capacity (Article 322, Civil Code).
When a minor is determined as the heir, he may acquire possession over assets by any title (including through testamentary provisions). However, he requires the assistance of his parents or guardians to use the rights linked to these assets (Article 443, Civil Code).
A minor may not be an executor of a will, even with his parents' or guardians' authorisation (Article 893, Civil Code).
A person can only be declared incapable under a court judgment based on Article 199 of the Civil Code.
Persistent physical or mental illnesses or deficiencies which prevent a person from governing himself are a cause for incapacitation (Article 200, Civil Code).
Those who have a legitimate interest in the incapacitation of a person must request the court to rule on that person's capacity.
The declaration of incapacity can be requested by the (Article 757, Civil Procedure Act):
Person presumed incompetent.
Spouse or person in a de facto situation of a similar nature, such as cohabitees or civil partners.
Descendants, ascendants or siblings of the presumed incompetent.
However, public authorities can also initiate incapacitation proceedings when they deem it appropriate.
The court hearing requires the participation of the person whose capacity is in question.
The formalities of contracts, wills and other legal acts must be governed by the law of the country in which they are executed (Article 11.1, Civil Code). Therefore, a power of attorney which meets the formal requirements established by the laws of the country where it has been granted is considered valid in Spain, as long as the power of attorney is legalised by a Spanish Consul or through the 1961 Hague Convention process.
On 4 July 2012, EU Regulation 650/2012 on jurisdiction, applicable law, recognition and enforcement of decisions and acceptance and enforcement of authentic instruments in matters of succession and on the creation of a European Certificate of Succession was approved.
Regulation 650/2012 will not apply to tax issues, customs or administrative matters. Among the regulation's most important modifications is the use of the last habitual place of residence of the deceased to determine matters such as the applicable law to the succession and the jurisdiction of the courts.
Significant areas of Spanish succession law will require modification to avoid contradictions with the provisions of Regulation 650/2012. The Regulation will apply from 17 August 2015.
W www.agenciatributaria.es
www.agenciatributaria.es/AEAT.internet/Inicio_en_GB/English/English.shtml
Within the official website of the Spanish Tax Administration, the section cited contains rules or information relating to non-resident taxpayers which is also available in English. Each autonomous community has its own official website (English translations are not available in most cases).
W www.mjusticia.gob.es/cs/Satellite/es/1215198252168/DetalleInformacion.html
Official website of the Spanish Ministry of Justice containing a loose translation of the most important legal bodies, including the Spanish Civil Code and the Spanish Civil Procedure Act. The translations are for guidance only.
W www.minhap.gob.es/es-ES/Normativa%20y%20doctrina/Normativa/CDI/Paginas/cdi.aspx
The network of double tax treaties entered into by Spain can be found in this official website.
W www.boe.es/buscar/act.php?id=BOE-A-1889-476
Official website of the State Agency of the Official State Bulletin (Boletín Oficial del Estado) (BOE) where all original language text of current legislation is published.
T +34 91 597 09 42
F +34 91 586 03 76
E guillermo.canalejo@uria.com
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Qualified. Spain, 1993
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Recent transactions
T +34 93 416 51 30
F +34 93 416 55 12
E javier.gravalos@uria.com
W www.uria.com
Qualified. Spain, 2007
Areas of practice. Tax.
Recent transactions
T +34 91 586 04 37
F +34 91 586 03 76
E ana.suarez@uria.com
W www.uria.com
Qualified. Spain, 1995
Areas of practice. Tax.
Recent transactions
T +34 91 586 03 95
F +34 91 586 45 66
E alvaro.argumedo@uria.com
W www.uria.com
Qualified. Spain, 1991
Areas of practice. Civil and commercial litigation; contract law; real property law; succession law; domestic and international arbitration.
Recent transactions
