The Spanish Directorate General of Taxes (DGT) has once again addressed a common question regarding family transactions with an international dimension: whether a monetary gift is subject to tax in Spain when the recipient child lives abroad. The answer is yes – when the funds are held in a Spanish bank account at the time of the transfer.
Monetary gift from Spain to a child abroad
The case analysed in binding ruling V2129-25 (in Spanish), issued on 11 November 2025, stems from a common scenario – a parent transfers money to their child, who resides in the United Kingdom. The key question is whether the recipient must pay Inheritance and Gift Tax in Spain despite living abroad.
The Spanish Tax Agency (DGT) provides a clear answer – the transaction is taxable in Spain. The determining factor is not the recipient’s place of residence, but the money's location at the time the gift is made.
Real obligation in donations to non-residents
Spanish Law 29/1987 on Inheritance and Gift Tax establishes that the donee – the recipient of the money – is responsible for payment. However, when the beneficiary does not reside in Spain, an important nuance applies – the concept of "real obligation".
This means that non-residents are only taxed in Spain on assets and rights located within Spain. The key point in this case is that the Spanish Tax Agency (DGT) considers the money to retain a territorial link to Spain, as it is held in a Spanish bank account at the time of the gift.
The child's residency does not exempt them from paying gift tax in Spain
One of the clearest conclusions from this ruling is that living abroad does not protect individuals from taxation in Spain in these cases. The tax authorities stress that what matters is not the child’s residence, but where the money is located when the gift is made.
This dispels a widespread misconception – that moving abroad avoids tax liability in Spain. In reality, non-residents remain subject to tax on assets located within Spanish territory.
Compliance with European Law: the right to regional benefits
Despite being a non-resident, the taxpayer may still opt to apply the regulations of an Autonomous Community, which can lead to significant tax savings depending on the rules in force.
This is not a discretionary benefit, but stems from the second additional provision of Law 29/1987, introduced to align Spanish legislation with the judgment of the Court of Justice of the European Union (CJEU) of 3 September 2014. That ruling required Spain to remove discrimination against non-residents, granting them access to the same tax advantages as residents.
However, this right is not a free choice. The applicable Autonomous Community must be determined according to objective legal criteria set out in the regulations.
In cases involving monetary gifts – classified as movable assets – the law states that the donee may apply the regulations of the Autonomous Community where the money has been located for the greatest number of days during the five years before the donation.
This calculation must be carried out strictly from date to date, ending the day before the transfer takes place. It is a decisive factor, as it directly determines the final tax burden.
It is also important to note that this option applies in full. If the beneficiary opts for regional regulations, they must comply with all the rules of that autonomous community – including reductions, tax bands and allowances – without being able to combine them with elements of the national system. As such, tracking the location of the funds over the previous five years is not a minor detail, but the key legal factor in securing fair and optimised tax treatment.
How to declare a gift if the beneficiary is a non-resident?
In these cases, a notable distinction arises – while the taxpayer may apply the regulations of an Autonomous Community, the administration of the tax falls to the State. This creates a separation between the applicable rules and the competent authority, an aspect that is particularly relevant when planning such transactions.
The self-assessment must be submitted using Form 651 to the Spanish Tax Management Office. This reflects the absence of a regional connection point for non-resident taxpayers, which results in the process being centralised at the national level.
Key tax aspects in international money donations
This ruling reinforces a key principle in international taxation – for monetary gifts, liability depends primarily on where the money is located at the time of transfer. The beneficiary’s residence becomes secondary when the asset maintains a clear link to Spain.
This makes careful planning essential before carrying out such transactions. The funds' location, their history over recent years and the applicable regulations can significantly influence the final tax cost – particularly in a context of tax authorities ramping up traceability and scrutiny.
