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V1256-20 5 May 2020 · SG de Impuestos Patrimoniales, Tasas y Precios Públicos Criterion in force
ISD · trust

Residents in third countries may opt for regional regulations for Inheritance Tax

A US resident inquired about the taxation of shares in Spanish companies received through a trust following their father's death. The DGT clarified that trusts are not recognised and that the beneficiary may choose between state regulations or those of the deceased's Autonomous Community.

The question raised

Liability and accrual of the Inheritance and Gift Tax regarding the mortis causa succession in favor of the applicant for the acquisition of the share in the estate corresponding to them as the heir of the father under the stated alternative.

The DGT's ruling

Due to tax transparency, transfers from a trust are considered direct between the settlor and the beneficiary. The death of the settlor triggers the accrual of the tax through mortis causa acquisition. Non-residents in third countries may opt for either the state regulations or those of the Autonomous Community where the deceased resided. Once the regulations are chosen, they cannot be changed during the filing period.

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