International trusts and inbound workers: the regime of article 93 of the Personal Income Tax Act does not neutralise the resident beneficiary's inheritance tax exposure under personal obligation

The Spanish Directorate-General for Taxation (DGT), in its binding ruling V0986-25 of 10 June 2025 (Sub-Directorate-General for Wealth Taxes, Fees and Public Prices), confirms a doctrine of direct relevance to international succession planning for clients with Anglo-Saxon trust vehicles. Where the beneficiary is a Spanish tax resident benefiting from the special inbound regime of article 93 of the Personal Income Tax Act (LIRPF) —the so-called Ley Beckham—, the receipt of assets on the death of the settlor is subject to Spanish inheritance and gift tax (ISD) under personal obligation, on the entire estate, whether located inside or outside Spain. The Beckham regime does not provide immunity from that liability.

It is helpful to begin with the legislative framework, because the interaction between the civil-law treatment of the trust, the Beckham regime and wealth-related taxation is the operative key to the ruling.

The trust is a legal institution of Anglo-Saxon tradition that has not been recognised in the Spanish legal order. The DGT, in a doctrinal chain originating in ruling V1991-08 of 30 October 2008 and consolidated in successive rulings —including V0010-10, V1016-10, V0936-13, V2703-13, V0989-14, V1003-14, V1224-14, V1225-14, V1226-14, V1495-16, V0695-17 and V0817-18—, has articulated a core principle of transparency: for the purposes of Spanish tax law, the relations between the contributors of assets and the recipients or beneficiaries are deemed to take place directly between them, as if the trust did not exist.

This formulation, reproduced verbatim in V0986-25, operates as methodological premise. The tax characterisation is made not on the structure of the trust itself but on the material patrimonial movements that take place through the vehicle. In the words of the DGT, “by not recognising that a trust exists, the settlor or grantor continues to hold title to the assets contributed to it”.

Separately, article 93 of the LIRPF governs the special regime applicable to contributors who acquire their tax residence in Spain as a result of relocation to Spanish territory. The regime allows taxation, during the year of change of residence and the five following years, in accordance with the rules of the Non-Resident Income Tax Act (TRLIRNR), with certain favourable features. The critical point, for purposes of the ruling, is that the contributor benefiting from the regime of article 93 remains a Spanish tax resident; what the regime modulates is the method of calculating the personal income tax liability, not residence itself.

The case under review reflects a paradigmatic structure in international wealth planning. The requestor’s father, a Panamanian tax resident, had incorporated several trusts in which he acted simultaneously as settlor, trustee and sole lifetime beneficiary. On his death, the designated beneficiaries would be his daughter —the requestor— and her descendants. The trusts held no Spanish-situs assets. The requestor, in turn, was a Spanish tax resident benefiting from the special regime of article 93 of the LIRPF for fiscal years 2024 to 2029, with habitual residence in the Madrid Autonomous Community.

The ruling addressed two successive questions.

The first, during the settlor’s lifetime: whether the requestor, as a prospective trust beneficiary, was required to include the assets held by the trust in her returns for wealth tax (IP) and the temporary Solidarity Tax for Large Fortunes (ITSGF).

The second, on the settlor’s death: whether the acquisition of the trust assets by the requestor, as beneficiary, was subject to ISD; if so, which assets would comprise the inheritance, which autonomous-community rules would apply and which exemptions, reductions and consanguinity coefficients would operate.

The DGT articulates its response on three pillars that warrant careful separate treatment, because each contributes an operative key.

First, during the settlor’s lifetime, the requestor does not include the trust assets in her IP or ITSGF returns. The transparency doctrine leads to a latent title in the settlor: he retains, for the purposes of Spanish law, title to the assets contributed to the trust. The daughter, a mere prospective beneficiary, has no consolidated economic rights that justify inclusion in her taxable wealth. The characterisation pivots on economic reality, not on the Anglo-Saxon formality of the trust.

Second, on the settlor’s death, a direct mortis causa transfer takes place —for the purposes of Spanish law— from the settlor to the requestor. The transparency doctrine operates, at that point, as a fiction of immediate transfer: the trust assets pass, in economic continuity, from the deceased father to the beneficiary daughter. The transaction is subject to ISD under the mortis causa acquisition modality.

Third, and this is the point of greatest planning significance, the ISD applies under personal obligation. The requestor, as a Spanish tax resident, is taxable on the entire estate she receives on the father’s death, regardless of the location of the assets held in the trust patrimony. That is, she is taxed in Spain on the Panamanian assets, the international financial assets, the foreign real estate and any other element included in the trust’s patrimony.

The interplay with the regime of article 93 of the LIRPF is clear. The DGT reasons expressly: “those who elect to benefit from the special regime are individuals who effectively relocate to Spanish territory to reside there, as a consequence of which they acquire their tax residence in Spain, and continue to maintain their status as taxpayers for personal income tax purposes. Solely for the purposes of their taxation, they determine their tax liability in accordance with the rules established in the consolidated text of the Non-Resident Income Tax Act… at no point is it suggested that such persons could not be treated as resident in Spain”.

The consequent conclusion: the Beckham regime does not affect the ISD personal-obligation liability or the IP exposure. What the regime allows is modulation of personal income tax, not conversion of the contributor into a non-resident for the purposes of other taxes. The requestor is taxed, as a Spanish tax resident, on all assets of the estate, whether located in Spanish territory or abroad.

As regards the applicable autonomous-community rules and ISD reductions, the DGT refers to the connecting-factor rules of the second additional provision of the ISD Act: in the case of a mortis causa acquisition by a Spanish-resident heir from a non-resident decedent, the requestor may elect the application of the rules of the autonomous community in which the greater value of the assets situated in Spain is located; if no assets are in Spain, State rules apply with the option under article 32 of Law 22/2009 where applicable.

In our view, the DGT’s doctrine is consistent with the very nature of the article 93 LIRPF regime and with the logic of the trust transparency principle. The Beckham regime is a tax benefit applicable to personal income tax, not a general disconnection of the contributor from Spanish wealth taxation. Attempting to extend its effect to IP or ISD would distort the figure and turn it into a comprehensive wealth shield, which neither the legislator has provided for nor the DGT can accept by interpretive route.

Subject to the above, the doctrine signals three operative caveats that warrant retention.

First, trust transparency also projects onto Modelo 720 and, where applicable, onto correlated informational returns. V1495-16 had already anticipated the criterion: the resident settlor declares the trust assets as his or her own. The requestor, as a prospective beneficiary during the settlor’s lifetime, does not bear that obligation. On the death, the position changes: the assets enter her personal patrimony and the corresponding informational obligations are activated.

Second, the revocable or irrevocable character of the trust does not alter the core transparency principle. The DGT has maintained the criterion even in the face of formally irrevocable trusts (V0817-18 on an irrevocable Florida trust with the settlor’s power of substitution). The revocable or irrevocable character does, however, become relevant to the characterisation of intermediate acts —contributions, conversions, lifetime distributions— where the moment of transfer and the ISD treatment vary by modality.

Third, sound planning requires anticipation of the timing of the succession. The application of the Beckham regime may coincide chronologically with the ISD assessment —as in the case under review. The requestor, benefiting from the regime for 2024-2029, must reckon with the fact that the father’s death during that period generates inheritance liabilities on the entire patrimony, without reduction by reason of the inbound status. Liquidity provisioning and structuring of the autonomous-community option are central operative pieces.

The practical consequence is highly relevant for clients with international trust structures relocating to Spain under the Beckham regime.

It is advisable, in the first place, to map prior to the settlor’s death the composition of the trust patrimony. Identification of the included assets —financial assets, shareholdings, real estate, intellectual property, cash— allows for anticipation of the ISD taxable base and design of the autonomous-community option with economic coherence.

It is advisable, in the second place, to calibrate the lifetime distribution strategy. A partial distribution effected during the settlor’s lifetime —in favour of the beneficiary resident in Spain under the Beckham regime— is characterised, for tax purposes, as a direct gift from settlor to beneficiary, subject to ISD under the inter vivos modality with the applicable autonomous-community regime. The choice between progressive distribution and global succession transfer may have a materially distinct impact.

It is advisable, in the third place, to anticipate the interaction with the tax regimes of the settlor’s jurisdiction. Panama, in the case under review, operates a territorial regime with no inheritance tax on foreign assets. The absence of local taxation generates no double-taxation credit in Spain, but neither does it create additional litigation. Where the jurisdictions involved do tax succession —US federal, United Kingdom, France—, the articulation requires analysis of bilateral inheritance tax treaties, where they exist, and of unilateral mechanisms for the avoidance of double taxation.

In conclusion, what this new ruling of the Directorate-General for Taxation makes clear is that the special inbound regime of article 93 of the LIRPF does not operate as a general shield against Spanish wealth taxation: a resident beneficiary who acquires assets on the death of the settlor of an international trust is taxed under ISD by personal obligation on the worldwide estate, wherever located, with the inbound status providing no immunity. The trust transparency doctrine thus projects, with full consequence, onto the succession planning of clients with Anglo-Saxon vehicles in their structure.

Sources

• Directorate-General for Taxation, binding ruling V0986-25 of 10 June 2025, Sub-Directorate-General for Wealth Taxes, Fees and Public Prices: petete.tributos.hacienda.gob.es.
• Directorate-General for Taxation, binding ruling V1991-08 of 30 October 2008 — germinal ruling on trust fiscal transparency.
• Directorate-General for Taxation, binding ruling V0817-18 of 26 March 2018 — irrevocable Florida trust with power of substitution, central reference in the doctrinal chain.
• Directorate-General for Taxation, binding ruling V1495-16 of 8 April 2016 — application of Modelo 720 to the trust with settlor resident in Spain.
• Law 22/2009 of 18 December regulating the financing system of the Autonomous Communities — second additional provision of the ISD Act on applicable autonomous-community rules in non-resident cases.