Trusts and fideicomisos: how Hacienda treats them in Spain

The trust is a common law concept that the Spanish legal system does not include. Spain has not signed the 1985 Hague Convention on the law applicable to trusts and on their recognition, so for tax purposes, the Directorate-General for Taxes assumes the trust is not constituted and that relations between the person contributing the assets (the settlor) and the person receiving them (the beneficiary) are considered to take place directly between them, as if the trust did not exist.

This is not an isolated or recent opinion: the criterion has been repeated in binding rulings since 2008 (V1991-08) and has been maintained in the most recent ones, including V0817-18, V3394-19, V1949-22, V2033-22 and V0022-25, already from 2025. The practical consequence is uncomfortable but clear: the vehicle disappears and the administration only looks at 2 things, who put the assets in and who receives them, and at what time.

The same happens with the fideicomiso and any separate estate without legal personality: if the structure does not fit into Spanish law, the administration looks right through it and taxes the individuals. That is why the trust deed ceases to be a mere formality and becomes the piece that determines to whom every euro is attributed.

It is worth knowing from the start that this is an administrative criterion, not a written law on trusts. There is no rule stating how a trust is taxed: there is a repeated doctrine from the Directorate-General for Taxes which, furthermore, is always issued conditionally upon the facts that the Inspection and Management bodies will assess later.

As long as the settlor remains the owner in the eyes of Hacienda, the income generated by the assets (interest, dividends, rent, capital gains) is understood to be obtained by them. If they are a tax resident in Spain, it goes into their IRPF (Spanish personal income tax) for the financial year in which it is produced, whether distributed or not.

This point surprises almost everyone: you do not have to wait to get paid. The Directorate-General for Taxes expressly stated this when ruling that the income generated by the trust must be understood as obtained directly by the settlor, and that its taxation is determined by the IRPF law. Income from movable capital and capital gains go to the savings base, whose scale starts at 19% and reaches 28% in the highest brackets.

The same assets also count for Wealth Tax (form 714) and, if the net wealth is very high, for the temporary solidarity tax on large fortunes (form 718), which according to the AEAT (the Spanish tax agency) headquarters reaches estates over €3,000,000. The Income and Wealth Tax campaign for the 2025 financial year ran from 8 April to 30 June 2026, with 25 June as the limit if payment is paid by direct debit.

If the person residing in Spain is the beneficiary and not the settlor, the question shifts: what is examined is whether you already have an acquired right over those assets or only an expectation that depends on the trustee's decision.

Under the administrative criterion, the contribution to the trust alone produces no effects: if the structure is considered not constituted, there is no transfer to tax at that time and the settlor continues to hold ownership of what was contributed.

The tax appears later, and at 2 possible moments. If the delivery to a beneficiary who accepts it is formalised during their lifetime, there is an inter vivos transfer from the settlor to the beneficiary, subject to Inheritance and Gift Tax. If that delivery has not taken place, the settlor's death causes a transfer upon death of the assets that remained in the trust, to the extent that they were not already understood to have been transferred earlier.

The irrevocable label does not close the discussion. In one of its rulings, the Directorate-General for Taxes highlighted that the settlor could change the beneficiary even though the trust was classified as irrevocable, and therefore continued to attribute the assets to them. And when the trustee and the beneficiary are the same person, it is necessary to assess whether their disposal powers already amount to ownership.

Translated into practice: what decides is not the name of the trust, but what its documents say about who is in charge. If the settlor keeps the final word (changing beneficiaries, instructing the trustee, revoking), Hacienda will continue to attribute the assets and income to them.

It is treated as a direct succession from the settlor to you, not as a payment from a foreign entity. If you reside in Spain, you are taxed by personal obligation, meaning on everything you receive, wherever it is located.

Deadline and place: 6 months from the death, with the possibility of requesting an extension for another 6 if requested within the first 5 months. When the deceased was not a resident in Spain, the management corresponds to the National Tax Management Office of the AEAT (form 650), and you can opt for the regulations of the autonomous community where the highest value of the assets located in Spain is found or, if there are none, for those of the community where you reside.

That option is what decides the bill. The Inheritance and Gift Tax does not have 1 single figure for all of Spain: the state scale coexists with the reductions and allowances of each autonomous community, and the Basque Country and Navarre have their own regional regulations. Anyone who gives you a percentage without asking where you reside is not calculating anything.

If a similar tax was already paid abroad, the lesser of 2 amounts is deducted: what was actually paid abroad or the result of applying the average rate of the Spanish tax to the value of the assets located abroad. It is worth knowing that, regarding inheritances, the AEAT headquarters only lists treaties with France, Greece and Sweden: with the rest of the countries, including the United States and the United Kingdom, double taxation is corrected with this internal deduction and not with a treaty.

If the distribution arrives during their lifetime and consists of money or securities, the tax is settled before the autonomous community where you reside, using the form approved by that community, and the deadline is 30 working days from the day following the act or contract. Only donations of real estate located abroad in favour of residents and those of assets located in Spain in favour of non-residents go before the AEAT (form 651).

The trust as such is not declared. The underlying assets are declared: accounts, securities, rights, insurance, income and real estate. Listing the trust as if it were an entity is one of the most repeated mistakes and leaves the declaration incorrectly done.

The AEAT has resolved this in the frequently asked questions for form 720. If the settlor resides in Spain, they report those assets and rights as their owner. If the trustee resides in Spain, they report due to their status as an authorised person, a person with disposal power or beneficiary of the accounts, or due to the beneficial ownership of the rest of the assets. And resident beneficiaries report when they are real and effective beneficiaries, not when they are only potential ones.

Thresholds and deadline: there are 3 blocks of information (accounts; securities, rights, insurance and income; real estate) with an independent limit of €50,000 each, and the declaration is submitted from 1 January to 31 March of the year following the financial year. Once submitted, it only needs to be repeated when any of the blocks increases by more than €20,000 compared to the last submitted declaration, or when ownership of something that was recorded is lost.

Regarding penalties, there is good news and a nuance. The good news: following the ruling of the Court of Justice of the European Union of 27 January 2022 and Law 5/2022, form 720 is penalised under the general regime for informative declarations, not the previous aggravated regime. The nuance: it is still an infringement, and submitting it on your own initiative before a requirement arrives is not the same as submitting it afterwards. Form 720 is an informative declaration, with no quota to pay, so its late submission always falls within the penalty regime of article 198 of the General Tax Law; what changes is that, when submitted without a prior requirement from the administration, the penalty and its minimum and maximum limits are reduced by half.

With paperwork and consistency between financial years. The replies from the Directorate-General for Taxes are issued conditionally upon the assessment of the factual issues carried out by the Inspection and Management bodies, so the file you can show is what truly decides the outcome.

What we ask you for to build it: the trust deed and its annexes, the letter of wishes if it exists, the trustee's agreements or minutes, the statements and valuations of each asset as of 31 December of each year, the receipt for each distribution received, the taxes paid abroad and proof of your tax residence in each financial year. With a translation when the body requires it.

It is not advisable to rely on silence: financial accounts located abroad reach Hacienda through international agreements for the automatic exchange of information between administrations. The useful question is not whether they will find out, but what version of the facts they will encounter.

And an honest precaution: in irrevocable and discretionary trusts, where neither the settlor nor the beneficiary have firm rights, the exact moment when the administration demands the tax is not closed by a written rule. That is why each case is studied with the document in front of us before submitting anything.

In common territory, form 720 and the IRPF are state-wide and work the same in all communities, with the regional part of the IRPF scale depending on where you reside. The Basque Country and Navarre fall outside that common territory: due to the Economic Agreement and the Economic Convention, they have their own regulatory competence over the IRPF and over the declaration of assets and rights located abroad, which are governed by their regional regulations and submitted to their own tax authorities, with their own forms and deadlines. And across the whole country, what changes the outcome the most is the Inheritance and Gift Tax.

The Canary Islands approve their own reductions and allowances like any common regime community; Ceuta and Melilla have their own treatment within the state rule; and the Basque Country and Navarre do not apply an allowance on top of the state one, but rather their own regional regulations, with their administration and their own forms, both in Inheritance and Gift Tax and in IRPF and the informative obligations on assets abroad. Giving a state figure or a state form as if they were valid in those territories is a gross error, not a nuance.

That is why the 1st question we ask is not how much is in the trust, but where you have had your habitual residence in recent years: from there comes the applicable regulation and, with it, the amount.

If your case fits into this guide, Managora prepares and submits it for you: the declaration of assets and rights abroad (form 720), your income tax return (form 100) and the settlement in Spain of an international inheritance with assets abroad or in a trust. You can see the updated amount for each service on its file.