I’m a Spanish citizen living, working and paying taxes in the UK since 1996.
My parents live in Madrid and they own a flat which they are considering donating to my brother, my sister and I so that each of us would own one third of the property.
Currently under the tax regulations in Madrid, both “inheritance” and “gift” tax are abolished, which means my brother and sister who are Spanish tax residents would have no tax to pay whatsoever if they were to receive this donation from my parents. These liberal tax regulations in Madrid are likely to change in the not-so-distant future and it is likely that inheritance and gift taxes will be reintroduced, so my parents are considering proceeding with the donation before this happens.
As I am a UK tax resident, how would receiving the gift of one third of a property in Madrid affect me?
• Would I have to declare this gift in the UK and would I have to pay tax on the value of my share even if the flat is not sold and my parents continue to live in it for some years?
• Or would I only need to declare it in the event that the flat were sold and I were to bring my share of the sold price to the UK?
I would be most grateful if someone could shed some light on this. Many thanks in advance!
The value of the property is around EUR 300,000 so my share would be around EUR 100,000
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