SPAIN Law and Practice Contributed by: Álvaro Paniagua Rico and Borja López Pol, Anaford Abogados
2. Succession##head2## 2.1 Cultural Considerations in Succession Planning Succession, understood as the process of transfer - ring assets via mortis causa, has always had a long tradition in Spain from a legal standpoint, with com - prehensive civil and tax legislation in place. It should be noted that, in addition to state civil regu - lations, the autonomous communities have their own civil succession regimes, demonstrating Spain’s rich legal and historical heritage. Likewise, from a tax point of view, which is what con - cerns us in this section, Spanish legislation can be divided into two main blocks:
has signed only three such agreements: with Greece, France and Sweden. Outside of these three countries, it is impossible to regulate the regulatory power for the tax in question; therefore, comprehensive advice is crucial to avoid undesirable effects. The best way to address or anticipate these issues is to gather the family’s information and concerns in advance and to follow a step-by-step plan that ena - bles the family’s goals to be achieved from technical and governance management perspectives. 2.3 Forced Heirship Laws Spanish civil law recognises the concept of legitimate inheritance and compulsory heirs. Legitimate inherit - ance is the portion of the estate reserved by law for certain heirs, who are therefore known as compulsory heirs. The testator cannot deprive the heirs of their legiti - mate portion except in cases expressly provided for by law (cases of disinheritance) and cannot impose any charge or encumbrance on it. The law prohibits agreements between the testator and their compulsory heirs concerning the legiti - mate portion of the estate. As a result, any waiver or transaction related to this portion is considered null and void. Upon the testator’s death, the compulsory heirs have the right to claim their legitimate portion. The only requirement is that they must bring into the estate any benefits they may have received through the waiver or transaction. Mandatory heirs are: • children and their descendants with respect to their parents and ascendants; • in the absence of the above, parents and ascend - ants with respect to their children and descend - ants; and • the widower or widow. The legitimate portion of children and descendants consists of two-thirds of the inheritance assets of the father and mother.
• state legislation; and • regional legislation.
State legislation acts as a general legislative frame - work (a law dating back to the last century, although it has evolved) and the autonomous communities have the power to develop the framework established by state regulations, as it is a transferred tax. The key measures to consider for a smooth and tax-efficient succession primarily involve the family relationships between the deceased and their heirs. Additionally, recognising certain active companies as family businesses can result in virtually no tax on those assets. 2.2 International Planning The international component of inheritance is particu - larly relevant today, given the increasing mobility of the population and the resulting dispersion of families. Each country treats inheritance taxes differently, so it is essential to anticipate potential inheritance issues arising from different jurisdictions and, as far as pos - sible, avoid double taxation. Spain has a long tradition of signing agreements to avoid double taxation for personal income tax and wealth tax purposes. However, for inheritance tax, it
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