B Law & Tax
13 July 2023

Tax Advisor: How does Temporary Solidarity Tax on Large Fortunes affect on ‘Beckham Law’?

We solve all the questions and concerns that may arise for the taxpayer when filing for the first time the return of the new tax on large estates for the year 2022, whose filing deadline has just begun.

Are the inherited estates subject to taxation under the Temporary Solidarity Tax on Large Estates?

No. Lapsed inheritances are not considered taxpayers of the tax and the current regulations do not specify how the assets and rights that make up the inheritance are to be assigned to the heirs. Therefore, once the inheritance is accepted, the heirs must file supplementary returns corresponding to the periods elapsed since the death of the deceased, since the effects of the acceptance of the inheritance go back to the time of the death of the deceased.

Is the Danish citizen, who moved to Spain in March 2022 to work in a technology company under the special regime for posted workers, known as the ‘Beckham Law’, required to file the Impuesto sobre las Grandes Fortunas (ITSGF) for his global estate?

Individuals who establish their tax residence in Spain due to their relocation to Spanish territory have the option of opting to pay Non-Resident Income Tax, while maintaining their status as taxpayers of Personal Income Tax. This option applies during the tax period in which the change of residence takes place and during the following five tax periods.

If the taxpayer chooses to be taxed under the Non-Resident Income Tax, he/she will be subject by real obligation to Wealth Tax. In addition, those taxpayers subject to the Temporary Solidarity Tax of Great Fortunes who avail themselves of the special regime applicable to displaced workers will also be subject by real obligation to Wealth Tax and the Temporary Solidarity Tax of Great Fortunes during the entire period in which they avail themselves of the Non-Resident Income Tax.

Is a non-resident who owns a portfolio of investment funds issued by non-resident entities and whose value exceeds 4,000,000 euros subject to the Temporary Solidarity Tax on Major Fortunes?

Since the banking entity is limited to a mediating function and the financial products are not and cannot be exercised or fulfilled in Spanish territory, no real obligation taxation by the non-resident is required, as long as there are no outstanding balances in such entity due to the complete acquisition of such products.

B Law & Tax International Tax & Legal Advisors.

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