The current health and economic crisis has led to the indebtedness of many people in Spain, which is why more and more are resorting, given the lack of liquidity to face the debt, to put your assets in the name of your minor children to avoid seizure. In this way, the debtors are declared insolvent since their children are the ones who own the capital or the real estate by having received them in a donation.
Minors are responsible
However, the Tax agency It has been claiming for a long time to pay the debt, even if the recipients are minor children or even when the donation of goods is not motivated by any debt. That is, even if the donation was made before the debt was claimed or existed. For example, if the debt with the Treasury had been contracted in 2010 by not declaring a capital gain, from this moment, the present and future equity is linked to the payment of the debt contracted, even though the donation was made when the Treasury had not yet claimed the debt. And it is that the donation can be considered as a act of depatrimonialization which has been carried out after having contracted the debt, which is why it is interpreted that it has been carried out to harm the Treasury.
However, The Treasury does not demand all the debt contracted, but the value of the donated goods. Let’s see the following example: If a taxpayer owns a debt of 500,000 euros with the Treasury and donates a property to his son with a value of 280,000, the minor will be required to pay the 280,000 he has received. Therefore, and according to article 42.2.a of the General Tax Law, it can claim the debt from minors.
The courts endorse the actions of the Tax Agency
The question of donating to minors to avoid the Treasury or whether they have to take responsibility for the debts, has gained notoriety again after the recent ruling of the Superior Court of Justice of Castilla y León that has ratified the procedure of the Treasury and adds to what has already been declared by the Central Economic-Administrative Court (TEAC) and the National Court. In the judgment, the minor who received land and several bank transfers from his parents through a donation is considered responsible for the tax debt. And now we have to wait for the Supreme Court to rule.
Living donations
Living donations are more frequent than we think. In Spain, donations are regulated by Inheritance and Donations Tax, the same that applies to inheritances. A donation involves the delivery of goods or capital to another person without receiving anything in return. Many times, parents decide to put their assets in the name of their children for different reasons: they no longer need those assets, they believe that their children will enjoy them more, they consider it as an advance on the inheritance, etc.
However, the essential requirement to make a donation of this type is that the donor (natural or legal person) has the capacity to contract and dispose of their assets, something that a debtor does not have.
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