# Declaring gift to Spanish Authorities



## shaunsheepblag (Aug 21, 2020)

Does anyone know/have experience about the process of declaring a financial gift (coming from abroad) to the Spanish authorities? e.g. Is it easy to do, or long and costly?

TIA


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## Alcalaina (Aug 6, 2010)

shaunsheepblag said:


> Does anyone know/have experience about the process of declaring a financial gift (coming from abroad) to the Spanish authorities? e.g. Is it easy to do, or long and costly?
> 
> TIA


Easy to do and I don't think it costs annything. This is the procedure.

https://www.agenciatributaria.gob.es/AEAT.sede/en_gb/procedimientoini/G702.shtml


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## kaipa (Aug 3, 2013)

Funnily enough I was asking my lawyer about this and he said that if the assest remained in UK and was from uk resident then no tax would be paid in spain although a declaration would be made on 720 if exceeded 20.000 euros. He claimed the same was true on inheritance. If assest ( remained in uk , eg property) then no tax in spain irrespective of value but subject to uk inheritance tax. I kept pressing him on this as this was not what I had heard but hey...I am not a Spanish lawyer. Aside from this ,different regions have exemptions on gifts and inheritance ( they are the same in Spain) . In Valencia 100.000 euro is tax free but this is under EU law so could change.


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## Lynn R (Feb 21, 2014)

kaipa said:


> Funnily enough I was asking my lawyer about this and he said that if the assest remained in UK and was from uk resident then no tax would be paid in spain although a declaration would be made on 720 if exceeded 20.000 euros. He claimed the same was true on inheritance. If assest ( remained in uk , eg property) then no tax in spain irrespective of value but subject to uk inheritance tax. I kept pressing him on this as this was not what I had heard but hey...I am not a Spanish lawyer. Aside from this ,different regions have exemptions on gifts and inheritance ( they are the same in Spain) . In Valencia 100.000 euro is tax free but this is under EU law so could change.


My understanding was that it is very much dependent on where the recipient of the gift/beneficiary of the inheritance is tax resident. That is, if the recipient is tax resident in Spain then the gift/inheritance in taxable in Spain irrespective of where the asset is (and in addition it must be declared on a Modelo 720 if it increases the overseas assets of the recipient by €20k or more). However, if a Spanish tax resident dies and leave assets outside Spain to someone who is not tax resident in Spain (eg a UK citizen tax resident in Spain leaves a property and/or assets held in the UK to a relative who is tax resident in the UK) then those assets are not subject to Spanish IHT. However, if they leave assets held in Spain to a relative who is tax resident in the UK then those assets ARE subject to Spanish IHT.

If a Spanish tax resident were to submit a Modelo 790 in respect of a gift or inheritance which had not been declared for Spanish IHT/gift tax and any tax due paid, I think that could land them in trouble.


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## kaipa (Aug 3, 2013)

Lynn R said:


> kaipa said:
> 
> 
> > Funnily enough I was asking my lawyer about this and he said that if the assest remained in UK and was from uk resident then no tax would be paid in spain although a declaration would be made on 720 if exceeded 20.000 euros. He claimed the same was true on inheritance. If assest ( remained in uk , eg property) then no tax in spain irrespective of value but subject to uk inheritance tax. I kept pressing him on this as this was not what I had heard but hey...I am not a Spanish lawyer. Aside from this ,different regions have exemptions on gifts and inheritance ( they are the same in Spain) . In Valencia 100.000 euro is tax free but this is under EU law so could change.
> ...


This was my understanding and I really need to get my Spanish lawyer to explain his interpretation of things. One good thing is that in many regions there is a good exemption if your relationship to the donar is close. In which case you just submit forms with no tax payable. The problem occurs if it's a property in UK which is bequeathed to more than one person and the other wont sell. Then ( if the property is higher than 200.000 euros) you have to raise the Spanish tax money.


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## snikpoh (Nov 19, 2007)

it goes on Form 651 and it must be submitted within 30 days of receiving the gift.

https://www.agenciatributaria.es/static_files/Sede/Procedimiento_ayuda/G703/mod651.pdf


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## Lynn R (Feb 21, 2014)

kaipa said:


> This was my understanding and I really need to get my Spanish lawyer to explain his interpretation of things. One good thing is that in many regions there is a good exemption if your relationship to the donar is close. In which case you just submit forms with no tax payable. The problem occurs if it's a property in UK which is bequeathed to more than one person and the other wont sell. Then ( if the property is higher than 200.000 euros) you have to raise the Spanish tax money.


This seems to confirm the understanding both you and I have.

https://henrytowers.com/en/understanding-spanish-gift-tax-residents-and-non-residents


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## NickZ (Jun 26, 2009)

If this is a bank transfer your bank is obligated to report anything 10K or over.


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## Lynn R (Feb 21, 2014)

In the case of accounts held in the UK, this link gives details of the information banks and other financial institutions are obliged to provide in respect of account holders who are resident in any of the (hundreds of) countries signed up to the Automatic Exchange of Financial Information Agreement. They send the information to HMRC who share it with the tax authorities in the account holder's country of residence.

https://www.gov.uk/guidance/automatic-exchange-of-information-account-holders


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## kaipa (Aug 3, 2013)

One last thing: when my mother in law died it was such a mess with different children dividing up the estate and taxes and some not living in Spain the lawyer said just wait 4 years then file. He said this was what many Spanish did after 4 years there was no tax due. I know it's weird but sure enough the family did that and everything was fine with hacienda


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## Alcalaina (Aug 6, 2010)

kaipa said:


> One last thing: when my mother in law died it was such a mess with different children dividing up the estate and taxes and some not living in Spain the lawyer said just wait 4 years then file. He said this was what many Spanish did after 4 years there was no tax due. I know it's weird but sure enough the family did that and everything was fine with hacienda


That's a myth and I'm surprised lawyers are still spreading it. The time period for declaration expires after four years (a cumulative fine is added every year for late payment) but after that you still owe the money and there can be additional sanctions. You also lose the right to any reductions.


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## Overandout (Nov 10, 2012)

Lynn R said:


> If a Spanish tax resident were to submit a Modelo 790 in respect of a gift or inheritance which had not been declared for Spanish IHT/gift tax and any tax due paid, I think that could land them in trouble.


Quite a few years ago I inherited some money in the UK while resident in Spain. I was advised that I was not obliged to declare the inheritance as it was below taxable level in Madrid.

I did however have to declare it on the 720, which I did correctly as long as the money stayed in the UK account, which was several years.

I was never asked by the Spanish authorities where that money came from.

I admit however that I was never entirely convinced that the advice I received was correct and it caused me a bit of concern for a while. In hindsight, I would ask more than one professional and challenge each of them with the response of the other(s) because they will all be different!


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## Pesky Wesky (May 10, 2009)

Overandout said:


> Quite a few years ago I inherited some money in the UK while resident in Spain. I was advised that I was not obliged to declare the inheritance as it was below taxable level in Madrid.
> 
> I did however have to declare it on the 720, which I did correctly as long as the money stayed in the UK account, which was several years.
> 
> ...


Isn't it better to ask the tax authorities themselves what the procedure is?


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## kaipa (Aug 3, 2013)

Overandout said:


> Lynn R said:
> 
> 
> > If a Spanish tax resident were to submit a Modelo 790 in respect of a gift or inheritance which had not been declared for Spanish IHT/gift tax and any tax due paid, I think that could land them in trouble.
> ...


Now that's funny because I have seen 2 different lawyers about this and both have said the same as yours! Both say if money remains I UK and it was taxed there then I just declare on 720 or 100 if the asset has made any income . I showed them some of the English stuff from various sites and they just tell me that it is I interpreted wrong!!. I really am confused now!


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## kaipa (Aug 3, 2013)

Pesky Wesky said:


> Overandout said:
> 
> 
> > Quite a few years ago I inherited some money in the UK while resident in Spain. I was advised that I was not obliged to declare the inheritance as it was below taxable level in Madrid.
> ...


I am assuming that 2 lawyers should know this
I dont want to keep insisting they are wrong but there again what is one meant to do?


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## Overandout (Nov 10, 2012)

Pesky Wesky said:


> Isn't it better to ask the tax authorities themselves what the procedure is?


I'm not sure that the operatives that you can speak to are qualified enough to give advice, I seem to recall even that they are not allowed to answer hypothetical queries (but that is a vague memory).

In any case, my naturally cautious persuasion makes me avoid questions such as "do I owe you any money?", people usually have a default answer to that question, and it is not exactly based on impartial and reasoned assessment of the situation!


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## mrypg9 (Apr 26, 2008)

kaipa said:


> I am assuming that 2 lawyers should know this
> I dont want to keep insisting they are wrong but there again what is one meant to do?


If you can go to the direct source. It's easy to find out legal stuff, all kinds of laws, norms etc. these days, if you have the time, perseverance and inclination.

I have three Spanish friends who are lawyers. I don't trust any of them to be 100% correct and knowledgeable.
Same with contables. I got a tax bill with fine 9000 euros from TA last year. One contable told me to pay up, not worth disputing. Went to a second one. After some toing and froing between him ad the tax office, I paid......Nothing.

Being a lawyer here isn't the same as in the UK where it seems a higher standard of education is required.


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## Overandout (Nov 10, 2012)

kaipa said:


> Now that's funny because I have seen 2 different lawyers about this and both have said the same as yours! Both say if money remains I UK and it was taxed there then I just declare on 720 or 100 if the asset has made any income . I showed them some of the English stuff from various sites and they just tell me that it is I interpreted wrong!!. I really am confused now!


As far as I recall the fact that the money stayed in the UK was not a factor in declaring the inheritance or not, it was the amount.

The fact that it stayed in the UK meant that I had to declare it on the 720.


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## kaipa (Aug 3, 2013)

According to the second lawyer I saw he said that if the inheritance is taxed in uk then it cant be double taxed in Spain and that is why I should not worry. No clearer though!!


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## Pesky Wesky (May 10, 2009)

Overandout said:


> I'm not sure that the operatives that you can speak to are qualified enough to give advice, I seem to recall even that they are not allowed to answer hypothetical queries (but that is a vague memory).
> 
> In any case, my naturally cautious persuasion makes me avoid questions such as "do I owe you any money?", people usually have a default answer to that question, and it is not exactly based on impartial and reasoned assessment of the situation!


 I think if you have a query about tax they are obliged to give an answer and that if the person on the desk doesn't know, well that's what the boss is for. After all, in the end a lawyer/ solicitor can hypothesize all they want, but it's the people in the tax office that tell you if you've done it right or not.

I inherited last year and OH ended going to the tax offices in Madrid to ask about procedure. In fact in the end I haven't got anything because the house sale has been delayed, but still had to do the paperwork.


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## Overandout (Nov 10, 2012)

Pesky Wesky said:


> I think if you have a query about tax they are obliged to give an answer and that if the person on the desk doesn't know, well that's what the boss is for. After all, in the end a lawyer/ solicitor can hypothesize all they want, but it's the people in the tax office that tell you if you've done it right or not.
> 
> I inherited last year and OH ended going to the tax offices in Madrid to ask about procedure. In fact in the end I haven't got anything because the house sale has been delayed, but still had to do the paperwork.


My memory on this is not complete I'm afraid, it was over 14 years ago, but I am sure we did go to a local office of Hacienda and were told that they couldn't give "financial advice" and that we should speak to a specialist (which is what we did).

Probably it was the way we were asking the question at the time. If you ask how to declare an inheritance, certainly they will inform you, but if you ask if you have to / should declare it, I think they will not be able to indicate.


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## Pesky Wesky (May 10, 2009)

Overandout said:


> My memory on this is not complete I'm afraid, it was over 14 years ago, but I am sure we did go to a local office of Hacienda and were told that they couldn't give "financial advice" and that we should speak to a specialist (which is what we did).
> 
> Probably it was the way we were asking the question at the time. If you ask how to declare an inheritance, certainly they will inform you, but if you ask if you have to / should declare it, I think they will not be able to indicate.


I see what you mean


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## kaipa (Aug 3, 2013)

As a matter of interest I notice that Spain does not have a double taxation agreement with UK in relation to IHT but in the UK there is Unilateral Relief. Anyone any idea how it works? It seems to a system that prevents double payments but I am not sure?


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