SPAIN Law and Practice Contributed by: Álvaro Checa, Miguel Checa, José María Vargas-Machuca Reyes and Andrea Fernández Grymierski, KINSHIP
the deceased spent the greatest number of days during the five years preceding death; therefore, a change of residence shortly before demise, with the intention that a more favourable regional tax regime would apply, will generally have no effect. • In addition, although Spanish personal income tax residence is determined on a calendar-year basis (as described in 2.2 Income Tax Residency ), for IHT purposes tax residence of the heir/donor (and therefore, the worldwide basis for taxation) is assessed by reference to the 183-day test within the 365 days preceding the date of death or the lifetime transfer. As a result, an heir’s or a donee’s departure from Spain shortly before the demise or the lifetime transfer will generally not prevent expo- sure to Spanish IHT and GT on a worldwide basis. • As noted in 5.1 Lifetime Transfers , contractual succession agreements may allow the transfer to occur during the transferor’s lifetime without trig- gering immediate taxation of capital gains. How- ever, it should be noted that no step-up in tax basis is granted to the beneficiary for five years follow- ing the execution of the arrangement. This rule is specifically designed to prevent the use of succes- sion agreements as a mechanism for obtaining an untaxed step-up prior to an immediate sale. Digital succession in Spain must be understood as the projection of classical inheritance law onto intangible assets such as data, blockchain-based tokens, online accounts, electronic identities and platform-hosted content. The EU Succession Regulation provides a sufficiently flexible framework to accommodate these assets without creating new connecting factors, pro- vided that its provisions are interpreted functionally and systematically. Digital assets may qualify as patrimonial goods when they possess economic value and are legally transfer- able. While the lex successionis governs the acquisi- tion of the estate as a whole, the transferability of each digital asset depends on its specific material regime, including contract law, intellectual property and data protection rules. Spanish law requires careful co-ordi- 7. Succession of Digital Assets 7.1 Legal Framework
nation between succession law and Spain’s Organic Law on Data Protection (LOPDGDD), particularly con- cerning post-mortem access to personal data and the protection of third parties’ rights. Jurisdiction and applicable law are primarily deter- mined by the deceased’s habitual residence at the time of death (Arts. 4 and 21 of the Regulation). Although “digital residence” or electronic identity are not autonomous connecting factors under the Regulation, they may serve as evidentiary elements in identifying the centre of the deceased’s personal and economic interests. The principle of unity of suc- cession ensures that digital assets form part of the estate under a single applicable law, thereby avoiding fragmentation based on the physical location of serv- ers or the corporate seat of digital platforms. The mechanism of adaptation under Article 31 of the Regulation acquires particular importance in relation to crypto-assets and blockchain-based tokens, which may not have precise equivalents within traditional property categories of Spanish law. In this context, the notarial function is essential in translating techno- logically complex assets into legally cognisable rights capable of integration into domestic patrimonial struc- tures. 7.2 Planning Considerations From the systematic analysis of digital succession under the EU Succession Regulation and its interac- tion with Spanish law, several legal planning tech- niques have emerged to ensure the orderly transmis- sion of digital assets upon death. Testamentary planning remains the central instrument. Digital assets should be expressly included within the estate inventory. Although the principle of unity of suc- cession ensures that digital assets form part of the estate, explicit reference in a will reduces uncertainty, particularly where contractual restrictions or platform policies may affect transmissibility. Specific clauses may designate heirs for digital assets or appoint an executor with authority to manage, access or liquidate them. Professio iuris under Article 22 of the Regulation con- stitutes a powerful stabilising mechanism in cross-
168 CHAMBERS.COM
Powered by FlippingBook