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V2033-22 21 September 2022 · SG de Impuestos Patrimoniales, Tasas y Precios Públicos Criterion in force
IP · trust

The beneficiary of a trust must not include the assets in their Wealth Tax while the settlor is alive

A resident in Madrid asks whether the assets of a trust established by their father (a resident in Venezuela) must be taxed in their Wealth Tax. The DGT responds that, as the trust figure is not recognized in Spain, the settlor retains ownership of the assets and the beneficiary must not declare them.

The question raised

Question posed: Whether during the lifetime of the "settlor" the assets of the "trust" will not be subject to taxation in Spain via Wealth Tax at the level of the inquirer (beneficiary).

The DGT's ruling

Due to the tax transparency of the trust, the relationships are considered to be carried out directly between contributors and beneficiaries. As long as the settlor is alive, they maintain ownership of the assets, therefore the beneficiary must not include them in their Wealth Tax. Upon the death of the settlor, a mortis causa transfer will occur subject to Inheritance and Gift Tax.

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