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V3394-19 11 December 2019 · SG de Impuestos Patrimoniales, Tasas y Precios Públicos Criterion in force
ISD · trust

Tax treatment of transfers of assets and income from a trust in Spain

A Spanish resident asks about the tax treatment of a US trust established by his brother and the obligation to declare it in Model 720. The DGT states that since the trust is not recognised, transfers are considered direct between the settlor and beneficiary.

The question raised

Question raised 1) Taxation under Inheritance and Gift Tax regarding the establishment of the trust and the contribution of assets and rights to it, the distributions ordered by the trustees in favor of beneficiaries resident in Spain, and upon the death of the settlor.

The DGT's ruling

Debido a la transparencia fiscal del trust, las transmisiones de bienes o rendimientos ordenadas por el trustee se consideran realizadas directamente entre el settlor y el beneficiario. Estas operaciones están sujetas al Impuesto sobre Sucesiones y Donaciones, ya sea por donaciones inter vivos o por transmisión mortis causa tras el fallecimiento del settlor. Asimismo, el beneficiario debe declarar en el Modelo 720 los bienes del trust por tener la condición de titular real.

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