WHAT WE HAVE HANDLED

Tax Planning for US Clients

A U.S. couple approached us after making a significant investment in Spain, as part of a much broader family wealth structure primarily located in the United States. Their concern was straightforward: they wanted to understand whether their exposure in Spain could trigger Spanish Wealth Tax or the Temporary Solidarity Tax on Large Fortunes and, more importantly, how that position could change if their ties with Spain increased over time.

The starting point was to reconstruct their overall position from a Spanish tax perspective. We reviewed the investment made, the ownership of the assets between the spouses, their residence status and the potential impact of spending longer periods of time in Spain.

Their joint investment exceeded €6 million, but the analysis could not simply be based on that combined figure. It was necessary to determine the portion of the assets attributable to each spouse and assess their potential exposure to the relevant Spanish taxes separately.

From there, we considered different scenarios: their current position as non-residents, what would change if one or both of them became Spanish tax residents, and which tax or reporting obligations could arise in each case.

The analysis allowed us to confirm their current tax position and, more importantly, to identify in advance which future decisions could materially change it.

This type of matter illustrates an issue we frequently see with US clients: the question is rarely limited to the investment made in Spain itself. The real issue is how that investment interacts with the rest of the client’s wealth, their residence position and the personal decisions they may take over the following years.

For that reason, in cross-border wealth matters of this size, we try to address these questions before a change of residence, a new investment or simply spending more time in Spain materially alters the client’s tax position.