A Gift or Donation under the Spanish Civil Code allows an individual to dispose of an asset in favour of another person on the provision that the recipient is fully prepared to accept the asset and all the liabilities that may be attached to the asset passed to them by Deed of Gift, which also can be described as a donation.

The Spanish Civil Code regulates such gifts or donations under the general provisions of contracts and obligations in the Spanish Civil Code as well as the local legislation governing the seventeen autonomous communities created by the Spanish Constitution of 1978.  The act of donation is legally binding on the recipient's acceptance.  The assets may be owned absolutely by the recipient or the donor may have usufruct, meaning the recipient has beneficial use of, the asset.  For example, the donor may have been granted the beneficial use of a property for their lifetime, the donor can pass this benefit to the recipient.

The recipients of a Deed of Gift are generally individuals close to the donor such as a spouse, or siblings, also their ascendants and descendants can be recipients.  There is also a provision for unrelated third parties.  The nature of the assets that can be included in a Deed of Gift can be both moveable and immoveable assets, for example, moveable assets could be a vehicle, or a boat or some other sea-going vessel.  Shares in a company or a bank account can also be donated.  Fixed assets, such as property, including commercial or industrial premises as well as retail premises can be donated and also a private house.

A Deed of Gift may be a more tax-efficient method of transferring real estate. It is often used as an alternative way of advantaging a family member rather than including the asset in a will.  A Deed of Gift attracts tax, the rate applied will depend on which autonomous region the property is situated in.

The lawyers in Giambrone's inheritance team have extensive expertise in guiding and advising clients as to the best way of advantaging your family members, depending on the type of asset and the rules applicable to the region in which any fixed assets are situated. There is a range of taxes that may apply depending on a number of things and seeking legal advice is strongly advised due to the factors that must be considered.  The tax position can vary due to the value of the property, which may be valued differently from the market value, also the age of the recipients may mean differing tax reliefs.  Whether or not the recipients are tax residents in Spain can also be important.  Another consideration is the family relationship between the donor and the recipient, this can make a difference as there may be different tax rates depending on how closely related they are.

The autonomous regions have the ability to vary the rules and allowances related to Deeds of Gift and donations which must be paid on receipt of the donation makes it imperative to be guided by our English speaking lawyers in Giambrone's inheritance team who are knowledgeable and have years of experience in assisting and advising individuals in all aspects of inheritance and the best way to provide for your heirs. 

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.