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V1949-22 13 September 2022 · SG de Impuestos Patrimoniales, Tasas y Precios Públicos Criterion in force
ISD · trust

The transfer of assets from a trust following the death of the settlor is subject to Inheritance Tax

A resident in Spain asks whether the receipt of assets from a trust established by their deceased father (a non-resident) is subject to Inheritance and Gift Tax. The DGT responds that, as the figure of the trust is not recognized in Spain, the transfer is considered to be direct from the settlor to the beneficiary.

The question raised

Question posed: Whether the transfer of the trust assets to the applicant would be subject to Inheritance and Gift Tax. Determination of the tax base.

The DGT's ruling

Due to the tax transparency of the trust, the relationships are considered to be carried out directly between the settlor and the beneficiary. The death of the settlor results in a mortis causa transfer subject to Inheritance and Gift Tax by virtue of the personal obligation of the resident beneficiary. The tax base is the net value of the assets and rights, reduced by deductible charges and debts. As there are no assets in Spain, the regulations of the Autonomous Community of the beneficiary's residence apply.

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