MEXICO Law and Practice Contributed by: Christian Lippert, Gabriela Pellón, Fabiola Jiménez and Cecilia Díaz de Rivera, Galicia Abogados
Under the separation of property regime, each spouse retains full ownership, administration and free dispo- sition of his/her assets, rights and property, regard- less of whether they were acquired before or during the marriage. Any assets that are acquired jointly by both spouses are governed by general co-ownership rules. A spouse may transfer or encumber his/her own property without the other’s consent. At death, the entire estate of the deceased spouse is subject to inheritance. Clawback and Fraudulent Transfers In Mexico, there are no specific clawback rules for lifetime transfers that may be deemed in derogation of inheritance rights. However, transfers made with the intention of defrauding creditors or depriving econom- ic dependents of their alimony may be challenged. 4.2 Prenuptial and Postnuptial Agreements Recognition and Validity Prenuptial and postnuptial agreements are fully rec- ognised under Mexican laws through the mechanism of capitulaciones matrimoniales . Capitulaciones mat- rimoniales apply to spouses married under either the community property regime or the separation of prop- erty regime. According to the Mexican civil codes, capitulaciones matrimoniales regarding the community property regime must be granted before a notary public when the spouses intend to transfer to each other the owner- ship of assets that require such formality. Any amend- ments to the capitulaciones matrimoniales must follow the same formalities as the original agreements. Succession Planning Relevance The choice of property regime has direct implications for succession planning. Couples with significant pre- marital assets or complex business interests frequent- ly choose separation of property to preserve clarity of ownership and facilitate estate administration. Capitu- laciones matrimoniales are therefore an essential first step in any comprehensive estate plan for married individuals. However, many couples prefer to rely on alternative structures such as fideicomisos or family companies, through which they may safeguard their assets in the event of divorce, thereby avoiding the
emotional burden that the negotiation and execution of capitulaciones matrimoniales may entail.
5. Tax Treatment of Lifetime Transfers and Testamentary Dispositions 5.1 Lifetime Transfers Mexican domestic legislation provides an exemption from Mexican income tax for lifetime transfers, such as gifts (donations). Specifically, the Mexican Income Tax Law (MITL) establishes that income received by Mexican tax resident individuals through donations may be exempt from tax, provided that such gifts are made between spouses or between ascendants and descendants, without any limit as to the amount. Donations received from other individuals may also qualify for an exemption, provided that the total value of the donation does not exceed a certain amount. If the value of the donation exceeds this threshold, the excess amount may become subject to income tax in the hands of the recipient. Outside of these scenarios, donations are generally treated as taxable income for the donee under Mexi- can income tax rules. As a result, when structuring family transfers or wealth planning through donations, it is important to carefully evaluate whether the trans- action falls within one of the statutory exemptions in order to avoid unintended tax consequences. For foreign tax residents, Mexican tax law also pro- vides certain exemptions for recipients of donations, provided that such gifts are made between spouses or solely from parents to children, and when the assets involve real property or shares in Mexican companies. This rule is intended to facilitate family wealth trans- fers involving Mexican assets without automatically triggering income tax consequences for non-resident recipients. In these cases, the recipient of the dona- tion (the donee) may receive the property or shares without being subject to Mexican income tax, provid- ed that the transfer complies with the applicable legal and tax requirements established under Mexican law.
104 CHAMBERS.COM
Powered by FlippingBook