Declaring trusts in Spain is no longer optional. As of the beginning of 2026, it is a critical obligation. If you are a tax resident here (or have assets) and are a settlororbeneficiary of a foreign trust, you should be aware of this.
The "invisibility" of these structures has ended. Therefore, we are seeing the Tax Agency (AEAT) apply a new doctrine: absolute tax transparency.
The critical problem is technical. Spain does not recognize the trust as a legal entity. For the law, it "doesn't exist." Previously, this created a legal limbo. However, it has now become a tool for tax audits.
Radical fiscal transparency: Lifting the veil
The Spanish Tax Agency ignores the trustee. It applies the "piercing of the corporate veil" principle. This has direct consequences for the obligation to declare trusts in Spain:
- Attribution of ownership: The Spanish Tax Agency (AEAT) considers that the assets remain the property of the Settlor (if revocable). Or, that they have already passed to the beneficiaries (if irrevocable).
- End of deferral: Trust income is directly subject to your personal income tax. This occurs even if you haven't received any money. For the exact calculation of these taxes, please see our guide on trust taxation.
- Criminal risk: If the structure is used to conceal the true owner, there is a risk. The authorities will not hesitate to pursue criminal charges.
The declaration of trusts in Spain: Focus on Mallorca
Although the regulation is national, the impact varies depending on the customer's origin. In the Balearic Islands, the inspection has focused on two key profiles.
US Citizens
This is the most volatile scenario. Many clients are setting up Irrevocable Trusts. Be careful. Spain may interpret this as an immediate donation.
Therefore, Inheritance Tax is due upon signing. This creates a complete mismatch with US tax credits.
United Kingdom and DACH Zone (Switzerland/Liechtenstein)
For the Discretionary Trusts, the Treasury considers that there has been no transfer. The assets remain in the Settlor.
This is very common in Mallorca. From our tax advisory division in Mallorca, we see many cases in Calvià and Andratx. Residents who fail to declare these structures are now facing massive data cross-checks.
The danger of Model 720
The declaration of trusts in Spain is formalized in Form 720. If you are the beneficial owner or a settlor with control, you must declare the underlying assets.
If you don't, you face serious problems:
- The imputation of an unjustified capital gain in the Personal Income Tax.
- A penalty of 150% of the fee. This rule remains in force and is rigorously applied in inspections.
Critical scenarios (2025-2026)
| Type of Trust | Vision of Spanish Inspection (2026) | Immediate Risk |
| Irrevocable Trust | Inter-vivos donation . | Gift Tax + Annual Income Tax. |
| Discretionary Trust | Total transparency. | Wealth Tax + Personal Income Tax Settlor. |
| Trust on Death | Direct inheritance. | Inheritance Tax. |
Technical Note: The DGT reiterates that the trust does not have legal personality. This reinforces the argument that action should be taken against natural persons.
Strategic advice: Urgent audit
Don't assume your structure is valid in Spain. If you are a tax resident (or plan to become one under the Beckham Law), take action.
First, we audit the Letter of Wishes. We need to check if the trust is truly irrevocable under Spanish law.
Second, plan your move. If you haven't already moved, dissolve the trust before acquiring tax residency. Once you're here, the cost of dismantling the structure is prohibitive.
Resitax: Experts in trusts and taxation in Mallorca
Properly establishing trusts in Spain requires experts. You need a partner who understands both Anglo-Saxon law and Spanish legal rigidity.
Are you worried that your structure will be vulnerable in 2026?
Contact Resitax here. We will perform a stress test of your trust deed. This will allow us to quantify your tax liability before the tax authorities take action.