SPAIN Law and Practice Contributed by: Álvaro Paniagua Rico and Borja López Pol, Anaford Abogados
shareholders and establish rules on governance, transfers of shares and dispute resolution and fam - ily protocols (family constitutions), which set out the family’s values, long-term objectives and governance principles, as well as policies regarding ownership, management, succession and the involvement of future generations in the business. 4.3 Transfer of Partial Interest The taxable base of the inheritance and gift tax is determined as follows: • in mortis causa transfers, the taxable base is the net value of the individual acquisition received by each heir or legatee, understood as the value of the assets and rights received, reduced by any deduct - ible charges and debts; and • in inter vivos gifts and other comparable gratui - tous transfers, the taxable base is the net value of the assets and rights acquired, understood as the value of the assets and rights, reduced by any deductible charges and debts. For the purposes of this tax, the value of assets and rights will generally be considered their market value. However, if the amount declared by the interested par - ties exceeds the market value, the higher amount will be used as the taxable base. Market value shall be understood as the most prob - able price at which an asset could be sold between independent parties, free of any charges or encum - brances. Therefore, the fair market value of the partial interest must be established for the purposes of the transac - tion.
arbitration or mediation can help to resolve the situ - ation. 5.2 Mechanism for Compensation Compensation mechanisms are provided for in the legislation itself. Compensation mechanisms and penalties for this pur - pose may also be provided for from an inheritance perspective. 6. Roles and Responsibilities of Fiduciaries 6.1 Prevalence of Corporate Fiduciaries In Spain, the use of corporate fiduciaries is not a com - mon practice. 6.2 Fiduciary Liabilities 7. Citizenship and Residency 7.1 Requirements for Domicile, Residency and Citizenship According to the Spanish Personal Income Tax Law, an individual would be considered a Spanish tax resi - dent if one of the following tests is met. Test 1 Physical presence in Spain: the individual spends more than 183 days in a calendar year (1 January to 31 December) in the Spanish territory. Temporary absences will be considered as time spent in Spain unless the individual can prove their tax resident sta - tus in another country. In order to apply this criterion, under the Spanish case law, Spanish Tax Authorities may establish a “calendar of stay”, which includes the days of presence in Spain This is not applicable in Spain. 6.3 Fiduciary Regulation This is not applicable in Spain. 6.4 Fiduciary Investment This is not applicable in Spain.
5. Wealth Disputes 5.1 Trends Driving Disputes
Disputes that may arise as a result of inheritance are usually due to a poor understanding of the law, a lack of foresight and sometimes an unwillingness to address any problems that may exist. In cases involving an international component, the issues can be even more complex, although instruments such as
606 CHAMBERS.COM
Powered by FlippingBook