Gift Taxation in Spain, Portugal and France

Spain taxes inter vivos gifts under the Impuesto sobre Sucesiones y Donaciones, regulated at state level by Ley 29/1987, de 18 de diciembre. Article 1 defines the taxable event as the acquisition of assets and rights by donation or other gratuitous inter vivos transfers. Article 3 establishes personal tax liability, making the recipient (donee) the taxable person and subjecting Spanish tax residents to ISD on worldwide gratuitous acquisitions, while non-residents are taxable only on assets and rights located in Spain. The donor is not subject to ISD but may have documentary and notarial obligations.

The taxable base is determined under Articles 9 and 12 of Ley 29/1987 by reference to the net real value of the assets transferred, reduced by deductible charges and debts where applicable. Valuation rules are complemented by regulatory provisions and administrative guidance issued by the Agencia Tributaria.

A defining feature of the Spanish system is the regulatory competence of the autonomous communities. Article 48 of Ley 22/2009 authorises the regions to regulate reductions, tax credits and effective rates applicable to ISD. This decentralisation has led to significant differences in effective taxation depending on the region of residence or asset connection.

The unequal treatment of residents and non-residents under regional ISD rules has been examined by both the Court of Justice of the European Union and the Spanish Constitutional Court. Following CJEU Case C-127/12 (European Commission v Spain), Spain amended its legislation to allow EU and EEA non-residents access to regional tax benefits. The Constitutional Court has further clarified the constitutional limits of regional autonomy in tax matters, including equality and legal certainty principles.

From a practical standpoint, the following scenarios are relevant in Spain.

• When a Spanish tax resident receives a gift from a non-resident, ISD applies if the asset is located in Spain, pursuant to Article 3 of Ley 29/1987 and guidance from the Agencia Tributaria (ISD – Non-residents). If the asset is located outside Spain, taxation depends on the nature of the asset and the donor’s residence, with EU and EEA connections allowing access to regional benefits, as clarified by Article 3 of Ley 29/1987 and CJEU Case C-127/12 (European Commission v Spain)
• When a Spanish tax resident gives a gift to a non-resident, Spain generally does not tax the donor. ISD applies only if the asset is located in Spain, in which case the non-resident donee is liable for Spanish ISD, in accordance with Article 3 of Ley 29/1987 and the procedural rules for filing Modelo 651 (Agencia Tributaria – Modelo 651).
• Where both donor and donee are non-residents but the gifted asset is located in Spain, ISD applies exclusively by reference to the Spanish-situs asset, and filing obligations arise via Modelo 651, also pursuant to Article 3 of Ley 29/1987 (Agencia Tributaria – Modelo 651).

Filing obligations, deadlines and applicable forms for resident and non-resident taxpayers are detailed by the Agencia Tributaria. Non-residents generally file Modelo 651 within 30 business days from the date of the gift, subject to regional extensions where applicable. Both donor and recipient should ensure proper documentation to support valuation and entitlement to regional benefits.

Portugal does not levy a separate inheritance or gift tax. Gratuitous transfers are subject to Imposto do Selo, regulated by the Código do Imposto do Selo (CIS). Article 1(1) CIS defines stamp duty as applicable to acts, contracts and gratuitous acquisitions expressly listed in the General Stamp Duty Table. Gratuitous acquisitions are taxed under Item 1 of the Tabela Geral do Imposto do Selo.

The taxable person is generally the beneficiary of the gift, and the taxable value corresponds to the market value of the assets transferred, pursuant to Articles 9 and 15 CIS. The standard stamp duty rate for gratuitous acquisitions is 10 percent, subject to exemptions.

In cross-border situations, Portuguese stamp duty depends primarily on asset location rather than tax residence:

• When a Portuguese tax resident receives a gift from a non-resident, stamp duty applies only if the asset is located in Portugal. (CIS, Article 1(1) and Article 4(3))Gifts of foreign-situs assets fall outside the scope of CIS.
• When a Portuguese tax resident gives a gift to a non-resident, stamp duty applies only if the asset is located in Portugal, and the donee is the taxable person. (CIS, Articles 1(1) and 2)
• Where both donor and donee are non-residents but the gifted asset is located in Portugal, stamp duty applies on the Portuguese asset, subject to the family exemptions under Article 6(e).
• Where the gifted asset is located outside Portugal, CIS does not apply, irrespective of the residence of the donor or the beneficiary. (CIS, Article 4(3)).

France taxes inter vivos gifts under the regime of mutations à titre gratuit, regulated by the Code général des impôts (CGI). Article 757 CGI establishes the principle that donations are subject to transfer duties, while Articles 777 et seq. CGI set out progressive tax rates applicable after any allowances.

Relationship based allowances are provided under Article 779 CGI, including the standard parent child allowance, which is renewable every fifteen years. Reduced allowances apply to siblings and other relatives, and special allowances exist for disabled beneficiaries.

Territorial scope depends on the fiscal domicile of the donor. Under Article 750 ter CGI, donors domiciled in France are generally taxable on worldwide gifts, while non-domiciled donors are typically taxable only on French-situs assets, subject to applicable bilateral tax treaties.

Manual or informal gifts (don manuel) have been clarified by doctrine, administrative guidance, and case law. A manual gift becomes taxable only when it is revealed to the tax authorities, declared in an act subject to registration, or recognized judicially. The taxable base is generally the market value at the time of revelation. This interpretation is grounded in Article 757 CGI and confirmed by French tax administration guidance: BOFIP, DMTG-20-10-20-10-20130403.

The following scenarios are particularly relevant in France:

• Notarial deeds remain central in French practice. Notaires are responsible for registration, valuation, and payment of gift duties at the time of execution, ensuring legal and evidentiary certainty. Official administrative guidance is published by the French tax authorities via Service-public.fr, which clarifies procedural obligations and tax calculation methods for formal and manual donations:

Summary for professional practice:

When advising clients, any manual gift should be documented, and consideration given to the method and timing of disclosure to the tax authorities. This ensures that taxation is triggered correctly under Article 757 CGI and avoids disputes regarding valuation or evidentiary proof.

Cross-border gifts may give rise to concurrent taxing rights based on residence and asset situs. While some bilateral tax treaties cover inheritance taxes, treaty coverage for inter vivos gifts is inconsistent. In the absence of treaty relief, domestic mechanisms and EU law principles must be examined to mitigate double taxation.

In the absence of treaty relief, advisers must analyse each gift by reference to the residence of the donor, the residence of the donee, and the location of the asset, ensuring that both giving and receiving parties comply with local filing and reporting obligations to mitigate double taxation risk.