In our daily practice, the distinction between mortis causa donation and inter vivos donation with reservation of usufruct is fundamental, not only due to its legal implications but also because of the tax consequences that arise from them. The correct qualification of these acts is crucial, especially in an environment where tax reforms and resolutions from the Dirección General de Tributos (DGT) are constantly evolving. In this article, we will unravel these figures, analyzing their essential elements and the most relevant doctrinal and jurisprudential interpretations.
Mortis causa donation: Characteristics and tax treatment
A mortis causa donation is one that only takes effect after the donor's death. This type of donation, implicitly regulated in Article 620 of the Civil Code, is very similar to legacies, which often causes confusion in notarial practice. Unlike inter vivos donations, these cannot be revoked at the donor's will once deceased, bringing them closer to the realm of pure succession.
From a tax perspective, mortis causa donations are taxed under the Inheritance and Donations Tax (ISD) in its succession modality, not as donations. This implies a tax treatment that can be more beneficial in some autonomous communities, where regional regulations offer significant exemptions or reductions in the succession context.
Inter vivos donation with reservation of usufruct
On the other hand, the inter vivos donation with reservation of usufruct is a distinct figure that allows the donor to continue enjoying the donated asset while alive. This modality, covered in Article 467 of the Civil Code, involves an immediate transfer of bare ownership to the donee, while the usufruct remains with the donor. The complexity here lies in the tax valuation of both rights.
From a tax standpoint, this donation is taxed in the ISD as a pure and simple donation, which can result in a higher tax burden, depending on the taxable base and the value of the usufruct. Additionally, the correct valuation of the latter is a critical aspect, given that valuation tables may be subject to regulatory changes, as has occurred in the recent 2025 tax reform proposals.
Differences between legacy and donation with delivery at death
The legacy and the donation with delivery at death present similarities but also fundamental differences. A legacy is a disposition act due to death, carried out through a will, while the donation with delivery at death does not require such testamentary formality, although it does need the delivery of the asset to be conditioned upon the donor's death.
Jurisprudentially, the Supreme Court in its 2024 ruling (STS 123/2024) has established that the donation with delivery at death should be treated, for tax purposes, as a succession and not as a donation, pointing to the donor's intention as a decisive criterion for its qualification. This interpretation underscores the importance of adequately documenting the donor's will.
Qualification issues in notarial practice
In notarial practice, one of the most frequent challenges is the correct qualification of mortis causa donations versus legacies. Ambiguity in the wording of clauses can lead to misinterpretations and, consequently, to unwanted tax implications. Precision in the terms used and in the drafting of deeds is key to avoiding future litigation.
A common mistake is to confuse the figure of the donation with delivery at death with the legacy, especially when the act is not clearly documented. Doctrine has pointed out that the subjective element, that is, the donor's intention, is crucial for the correct qualification of the act, which aligns with recent interpretations by the DGT.
- Clearly identify the donor's intention in the document.
- Ensure that the delivery conditions are explicitly stipulated.
- Review applicable regional regulations to optimize the tax implications of the operation.
Differentiated tax consequences: ISD donations vs. ISD successions
The taxation of donations and successions presents significant differences that directly affect the tax cost of the act. While inter vivos donations are taxed immediately, mortis causa donations are integrated into the deceased's estate, applying the tax regime of successions, which, in many cases, is more favorable due to applicable reductions and bonuses.
The accrual of the tax is another critical factor. In inter vivos donations, the tax accrues at the time of the donation, while in mortis causa donations, the accrual occurs at the donor's death, which can offer greater long-term tax planning. This becomes a strategic aspect in the estate planning of our clients.
In conclusion, the distinction between mortis causa donation and inter vivos donation is crucial for proper succession and tax planning. Tools like LexPartis can facilitate the management and precise documentation of these processes, allowing professionals to provide more rigorous and efficient advice to their clients.