Practical Legal Notes - May 2025

1.- Swearing in of nationality before a Notary Public. Reminder of various aspects to be taken into account

It is linked (HERE) communication sent by the Civil Registrar of Barcelona, in relation to the oaths of nationality that are carried out before a Notary Public. Specifically:

• It is recalled that, in accordance with Article 51.1 of the Civil Registry Law, the interested parties may only keep two simple names or one compound name (and not three as some people have in their countries of origin).
• It is also reminded that it is not correct to keep the husband's surname in place of the mother's maiden name, nor should the mother's maiden name be accepted with the preposition of the husband's surname.
• Finally, it is important to verify the correct knowledge of the Spanish language, in order to ensure compliance with the provisions of the law and, where appropriate, to avoid identity theft.

To be taken into account in all nationality oaths to be formalized before a Notary Public.

2.- Cession of free housing from parents to children. It is not computed as a donation to be included in the inheritance.

Attached (HERE) link to the interesting Supreme Court Decision (STS 32/2025, of January 7), in which a case is resolved in which it is discussed whether the transfer (during the lifetime of the current owner) of a house to a child in precariousness (that is, leaving a house to a child to live in it in exchange for nothing), should be computable or not in the inheritance of such parents as a donation that can be collated, once their death occurs.

In this case, the Supreme Court responds in the negative, stating that, in these cases, it is a question of the free transfer of a property, which does not involve the donation of any right, since the person who transfers the property on a precarious basis, as in this case, can terminate this situation at will, without the occupant having a title that recognizes a right to possess beyond the will of the owner that is renewed at every moment. For that reason, it cannot be admitted that the market value of the use of the house assigned in precariousness should be computed for the purposes of the calculation of the legitimate or for its eventual collation.

3.- Tax flash. Incidence of the value of a building declared in deed in the calculation of the capital gain.

Attached (HERE) link to a new Fiscal Flash of the Notarial Association of Catalonia, in which the notary Mr. Manuel Sarobe Oyarzun, analyzes the resolution of the Economic-Administrative Court of November 19, 2024, on the incidence of the value of a building declared in a deed in the calculation of the capital gain.

Thus, as a key issue, the key question in these cases is what value can be computed for a building not accredited with invoices, the TEAC resolving that only the investments actually made and justified by documentation can be included in the acquisition value, so that the mere declaration in writing is not sufficient.

Thus, the taxpayer must keep the invoices until the sale of the property, so that, in the absence of proof, the Administration may assign a zero value to the building, even if a technical appraisal is presented without the support of accredited payments.

4.- The subrogation of the mortgagor, carried out in a public deed in the context of a sale of real estate, is not subject to the gradual payment of the AJD.

Attached (HERE) link to an interesting and very recent post of the prestigious law firm Ashurst, where in the same one they echo a recent binding consultation presented by this office, and solved by the General Directorate of Taxes, in which the doubt arises if the deed of sale of property and subrogation of mortgage debtor, is subject or not to the gradual quota of the AJD.

In said Resolution, the DGT responds negatively, so that, in this type of joint operations (i.e., sale plus subrogation of debtor), it is not subject to the gradual quota of the Stamp Duty Tax ("AJD"), without prejudice, of course, to the subjection to the tax of the sale itself, a non-controversial issue.

As soon as the resolution is published in the DGT search engine, it will be linked.

5.- Merger of companies and tax certifications. It is not necessary to prove that you are up to date with the payment of regional or local taxes.

Attached (HERE) Resolution of the General Directorate of Legal Security and Public Faith of April 2, 2025 (BOE of May 17, 2025), in which the General Directorate resolves a case related to a deed of merger of companies in which it is accredited that the companies involved in the merger are up to date with the payment of their tax obligations, providing for this purpose two certificates from the State Agency of Tax Administration and the Social Security.

Once the document was presented for registration, the Mercantile Registrar denied the registration, alleging that, in addition, it is necessary to prove that they are up to date with the payment of their tax obligations to the Autonomous Community and to the City Council to which they belong.

After the corresponding appeal, the Directorate General resolved the case by revoking the qualification note, considering that in these cases, it is only necessary to accredit that the company is up to date with its tax obligations with the AEAT (state tax authorities) and with the Social Security, and it is not proportionate to require further accreditation (with the regional or local administrations) in the case of this type of structural modifications.

6.- The renouncement of an inheritance in favor of a specific person generates tax obligations for the renouncing party.

Attached (HERE) link binding consultation of the DGT (number V0411-25, of March 20), in which the General Directorate of Taxes resolves a case of a taxpayer who renounced to 25% of an apartment he inherited, in favor of one of his brothers.

In these cases, the governing body of the Ministry of Finance determines that, when the taxpayer renounces the inheritance in favor of another heir, Inheritance Tax must also be paid, since it will be considered that the legacy has been previously accepted (it is therefore considered that it is not a pure renunciation of an inheritance but a renunciation in favor of a specific person).

In addition, the DGT points out that, in this case, the heir must also pay personal income tax on the donation to his brother, but only if it has resulted in a capital gain, whereas, if it is a loss, he will not be able to deduct it.

Purchase of VPO and ITP. Taxes must be paid at the reference value and then, if applicable, claim

Attached (HERE) link to the binding consultation of the DGT (number V0435-25, of March 21), in which the General Directorate of Taxes resolves a case of a taxpayer who acquires a subsidized housing (VPO), in which the purchase price (which has been fixed by the administration) is lower than the reference value.

In this case, the taxpayer raises the question of whether, as the sale price has been fixed by the administration, it is necessary to liquidate the ITP of the transaction based on that price or based on the reference value.

The DGT resolves the case by applying the general regulations, that is, it states that the taxpayer is obliged to make the corresponding self-assessment for the reference value, and once it has been paid, if it considers that the assigned value is detrimental to its legitimate interests, then it may claim a refund from the Tax Agency of the excess tax paid, through the legal channels established for this purpose.

8.- Form of determining the heir when the deceased has instituted heir, in his will, to the relative who takes care of him mostProhibition to dispose and expiration of his term. It is not necessary its express cancellation to formalize transmission.

Attached (HERE) Resolution of the General Directorate of Legal Security and Public Faith of April 2, 2025 (BOE of May 17, 2025), in which the General Directorate resolves a case related to a deed of inheritance, regarding the succession of a lady who, in her will, instituted as universal heir of all her assets "to the relatives who take care of her during the last years of her life".

After the death of the testatrix, the heir who has taken care of the lady, accredits such condition by means of a notoriety act, providing the pertinent proofs, which is declared as Notorious by the public notary in question.

Once this deed was presented for registration, the Registrar qualified it negatively, considering that the institution of the heir is uncertain and, therefore, it is appropriate to open the intestate succession.

Faced with this opinion, the corresponding appeal was filed before the General Directorate, the qualification was revoked, considering the course followed by the interested parties to be correct, that is, that in this type of situation, the designation of the heir is valid, and the appropriate instrument to determine the heir who has taken the greatest care of the testatrix is the notarial act of notoriety, in which the corresponding evidence must be provided to accredit the identity of the person in question.

9.- Business crisis and performance of the administrators. Things have to be done well or it can have serious consequences for the administrators.

Attached (HERE) link to the interesting judgment of the Provincial Court of Oviedo of March 4, 2025 (SAP 776/2025), in which a case is resolved regarding a disorderly and abrupt closing of operations in a commercial company (the classic "persianazo" where the company stops operating "from today to tomorrow", without following the established channels for business crises, and without carrying out an adequate liquidation of the assets and liabilities of the company).

In these cases, as stated in the Judgment, this can lead to the imposition of personal liabilities against the company's administrators, since, in short, any company "can go wrong", but in such a case, the law establishes the ways to order this business crisis (insolvency proceedings, etc.), so that, if these ways are not followed and the "persianazo" is chosen, this can lead to serious economic consequences for the company's managers who adopt this incorrect solution.

10.- Tax debts of the company and liability of the administrators. The fault of the administrators must be proved

Attached (HERE) link to a newspaper article that refers to a very recent and relevant ruling in the tax field, since the Supreme Court, in its ruling of May 20, 2025 (the link to it will be provided as soon as it is published in CENDOJ), has ruled that when a company has tax debts, the subsidiary liability of the administrators for such debts does not operate automatically, Rather, as it is of a sanctioning nature, in these cases the Tax Administration, in order to be able to make the derivation of liability provided for in the General Tax Law, it is necessary to observe a sanctioning procedure with all the constitutional guarantees (such as the presumption of innocence for example), being therefore mandatory to prove the fault of the administrator in the generation and non-payment of such debt.

Thus, from now on, when a company has debts, it will not be able to automatically demand their payment from its administrators, but it will have to prove its fault and responsibility in order to be able to demand their payment subsidiarily.