B Law & Tax
30 August 2023

Tax advisor: Tributes highlights the location of taxation for monetary gifts from abroad

In binding consultation V1903-23, issued on June 30, 2023, the Directorate General of Taxes clarifies to a resident whether he should be taxed in Spain for Inheritance and Gift Tax when receiving a monetary donation from abroad. In this case, a son received a monetary donation from his mother from Argentina, proceeds from the sale of a property.

First, it is noted that Inheritance and Gift Tax (ISD) applies to the acquisition of goods and rights free of charge inter vivos. The donee, in this case the son, would be subject to the payment of the tax as a taxpayer, according to article 5 of the Inheritance and Gift Tax Law (LISD), if he is an individual.

The Directorate General of Taxes analyzes articles 6 and 7 of the LISD, which deal with the personal and real obligation:

– Article 6 establishes that residents in Spain are obliged to pay the tax regardless of the location of the property acquired. This is determined according to the Personal Income Tax (IRPF) rules.

– Article 7 establishes that those who are not considered residents according to the previous article must pay the tax if the assets or rights are in Spanish territory or if they can be exercised or fulfilled in Spain.

In this context, since the donee is a resident in Spain, he/she is obliged to file a self-assessment of ISD, regardless of where the donation was made. The filing must be made in the autonomous community of residence, and the reductions, scales, deductions and allowances established by said community may be applied.

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