MEXICO Law and Practice Contributed by: Christian Lippert, Gabriela Pellón, Fabiola Jiménez and Cecilia Díaz de Rivera, Galicia Abogados
to the legal presumption of paternity), yet the particu- lar circumstances of children conceived through the posthumous use of preserved genetic material remain largely unaddressed across most jurisdictions. Where filiation can nonetheless be established (for instance, on the basis of prior written consent given by the deceased to posthumous reproduction),– the child would, in principle, be entitled to the same suc- cession rights as any other descendant, although this is likely to require judicial determination on a case-by- case basis. Estate Tax Treatment From a tax perspective, Mexican law does not contain specific provisions addressing non-traditional family structures. Instead, the tax treatment of inheritances, gifts and other wealth transfers is determined under the general rules of the Mexican Income Tax Law, which typically refer to transfers between spouses, ascendants and descendants. Mexico does not impose an inheritance or estate tax. As a general rule, transfers received by inheritance or legacy are exempt from income tax. Gifts may also benefit from exemptions where they occur between spouses or between ascendants and descendants in the direct line. Because Mexican tax rules must be interpreted strict- ly and cannot generally be extended by analogy, the application of these exemptions to non-traditional family relationships will typically depend on the rec- ognition of the relevant family relationship under the applicable civil law. For example, gifts between spouses are exempt from income tax under the Mexican Income Tax Law. Fol- lowing the constitutional recognition of same-sex marriage and equality of family rights, this exemption is generally understood to apply equally to same-sex spouses. Similarly, exemptions applicable to transfers between ascendants and descendants may extend to adopted children or other legally recognised parent- child relationships. In practice, the tax consequences in these situations will largely depend on how the relevant family rela-
tionship is recognised under the applicable state civil law. As Mexico is a federal system with state-level family law regulation, the civil law classification of the relationship may therefore be determinative for tax purposes. In cross-border situations, additional tax considera- tions may arise, particularly where foreign residents, foreign trusts or assets located in multiple jurisdictions are involved. In such cases, it is necessary to analyse both the Mexican tax treatment of the transfer and the potential tax implications in the relevant foreign jurisdictions. In Mexico, family and succession law falls within the competence of each of the 32 states, which gives rise to certain divergences among local civil and family codes. Although the general principles are consistent with those of the Federal Civil Code, differences in the specific regulation of matters such as concubinage, adoption, filiation through assisted reproduction tech- niques, and same-sex marriage may produce internal conflicts. For example, although the Supreme Court of Justice of the Nation ( Suprema Corte de Justicia de la Nación ) has declared unconstitutional those state laws that restrict marriage to heterosexual couples, not all states have amended their civil codes to reflect this criterion. Consequently, conflicts may arise when a same-sex couple that is validly married in one state (such as Mexico City) seeks recognition of their suc- cession rights in another state whose local legislation has not been updated. In such cases, the Supreme Court’s binding precedent and the constitutional prin- ciple of non-discrimination require the authorities of all states to recognise such marriages and the rights derived therefrom, including succession rights. Conflicts With Foreign Jurisdictions As a significant portion of Mexican high net worth families maintain ties with the United States, Spain or other countries, conflicts arise when family rela- tionships are recognised differently in the jurisdic- tions involved. For instance, the figure of concubinage (common law partnership), which under Mexican law 11.2 Conflicts and Divergent Laws Conflicts Between State Jurisdictions
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