Tax Blow to These Spaniards: Don't Cross the Line or You'll Regret It

Bank transfers between family members are common in Spain, whether to provide financial help or for other reasons. However, it is crucial to know the regulations of the Tax Agency to avoid tax issues.

Tax Agency alert on transfers between family members

The Tax Agency considers that money transfers between family members can be donations. These donations are subject to the Inheritance and Gift Tax, whose amount varies according to the autonomous community and the degree of kinship.

For example, in some regions, allowances allow this taxation to be minimal or even null in certain cases. Meanwhile, in others, the tax can be higher.

When must the bank inform the Tax Agency?

Banks are required to inform the Tax Agency about certain money movements. According to Law 7/2012, of October 29, banking entities must report any payment or collection exceeding 3,000 euros. Additionally, all transactions exceeding 10,000 euros and loans or credits over 6,000 euros are also under close scrutiny.

Limit on bank transfers

Although there is no specific limit for transfers between family members, operations that exceed certain amounts may be subject to analysis by the Tax Agency. For example, transfers exceeding 6,000 euros may be investigated to verify their origin and purpose.

The Tax Agency can investigate any transfer it considers suspicious, but it pays special attention to these situations. Additionally, operations involving 500 euro bills are also closely monitored.

• Cash deposits or withdrawals over 3,000 euros: Banks must inform the Tax Agency about these movements.
• Transfers exceeding 6,000 euros: They may be subject to analysis to verify their origin and purpose.
• Operations over 10,000 euros: They must be officially declared and are under surveillance to detect possible undeclared donations.

Do this to stay out of trouble

To avoid issues with the Tax Agency when making transfers between family members, it is advisable to keep clear records of why the transfer is made and where the funds come from.

If the transfer is a donation, declare it in the Inheritance and Gift Tax within the deadline, 30 business days from that operation. The autonomous communities have different regulations and allowances for the Inheritance and Gift Tax. Find out about the laws in your region.

Splitting a large amount into several small transfers to avoid the attention of the Tax Agency can be considered a fraudulent practice. If you have doubts or plan to make significant transfers, it is advisable to seek professional advice to ensure compliance with all tax obligations.