The Spanish Civil Code makes the provision for a person to freely dispose of an asset in favour of another person who is prepared to accept both the asset and any liabilities that are attached to the asset under a Deed of Gift, also known as a donation. Such donations are regulated under the general provisions of contracts and obligations outlined in the Spanish Civil Code and the local legislation in the different regions in Spain. The act of donation becomes binding from the moment of acceptance by the recipient.
An individual can freely dispose of their assets to the following:
The assets that can be put into a Deed of Gift are assets that are fully owned or usufruct (have the beneficial use of) by the donor:
A car or other vehicle
A boat or any other sea-worthy vessel
Shares in a company
A bank account
A commercial or industrial property
A Deed of Gift could be a tax-efficient method of transferring a real estate asset to a family member as opposed to relying on a will or the laws of succession of Spain. British ex-pats frequently make use of this method to pass Spanish assets, usually a property, to family members as an alternative to leaving an asset in a will.
The execution of a Deed of Gift in respect of a property will attract taxes that will be dependent on the region in which the property is situated. However, The difficulty for British ex-pats is the fact that Brexit clouds the decision as there is still no complete clarity as to whether there will be any significant changes in as to how UK citizens and their assets are to be dealt with after Brexit. It is considered possible by many professionals that there will not be any radical changes in the way that such matters are dealt with post-Brexit. However, the cautious advice is to complete all such actions before Brexit whilst there is lucidity with regard to the law and the implications in respect of Deeds of Gift and donations.
It is a reasonable assumption that the taxes and any other financial impact is unlikely to reduce after Brexit, therefore this is a case of acting sooner than later to ensure the best outcome for all parties.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.