The Central Economic-Administrative Court (TEAC), under the Ministry of Finance, has established criteria that can dramatically alter the way many people manage bank accounts shared with a deceased family member. According to a recent resolution published by the organization, the disposition of the deceased’s exclusive funds, even if deposited in a jointly owned account, constitutes a tacit acceptance of the inheritance.
The case analyzed by TEAC starts from a common situation: a story of an indistinct or joint nature in which two family members were owners. After the death of the first, the second, who was his heir, retired and used part of the funds, which automatically made him, in the eyes of the Treasury, the successor.
The court’s criteria have clear implications both in inheritance and gift tax (ISD) and in the possible obligations arising from accepting an inheritance that, for example, is full of debt. For this reason, explains Daniel Armendáriz, tax expert at TaxDown, it can help many people know how to proceed in a similar situation. The general recommendation is “do not touch the account until all details are confirmed”.
When faced with an inheritance, continues María Teresa Barea, spokesperson for the General Council of Notaries, there are three options: admit it, reject it or accept it for the benefit of the inventory, a method that allows the successor to pay any debts only with the legacy itself. If it is admitted, it can be so formally, but also tacitly, “through acts that imply or entail that the person accepts”. There are some very obvious ones. For example: a father dies and leaves a house that his son decides to rent, explains the notary. But there are others that are a little grayer and more dubious, such as the bank account.
TEAC makes several points to justify its position. He explains that a movement of money after death cannot be understood as an act of simple management or conservation, but as an authentic disposition of assets. That is, an operation that can only be carried out by someone acting “as an heir”. The disposition of the funds presupposes a “necessary willingness to accept” and, furthermore, it is an act that “there would be no right of execution without the capacity of heir”, underlines the TEAC, “since only as an heir could he acquire his assets”.
The organization emphasizes that the boundary between administration and disposal is decisive. We remind you that there are acts that do not imply acceptance, but in this case, he underlines, the operation carried out clearly exceeded this scope. The interested party did not simply keep or manage the funds in the interest of the deceased, but used them. Elena de la Plaza, head of the inheritance department of Vestalia Abogados, underlines that there is no tacit acceptance when operations are limited to “the management of funeral expenses, the care of non-deferrable or urgent payments, such as supplies or rent, the harvesting and sale of perishable fruits or the payment of taxes related to the deceased, including the liquidation of the ISD itself”.
The key is, continues De la Plaza, “to distinguish between acts of conservation or mere administration and acts of disposal of assets that can only be carried out by a fully accepting heir”. Many times, adds Barea, the problem “is justifying who owned the funds and what they were used for”, so it is very important to get good advice before making any moves.
Once the inheritance is accepted, the tax effects are clear. Once consent has been demonstrated, Armendáriz underlines, the obligation to regulate the DSI in relation to the tacitly accepted goods or rights is activated. The inheritance tax, of a state nature but managed independently, taxes all these transfers. The bill can vary greatly depending on the community of residence, the amount received and the type of relationship with the deceased.
There’s no going back
The Court takes advantage of the resolution to reiterate another criterion that the Revenue Agency has interpreted for many years. In the case analysed, the controversies increased when, once the inspection actions to request the liquidation of the ISD had begun, the interested party attempted to reject the inheritance before a notary. The problem is that this resignation could not overturn what happened: the tacit acceptance had already taken place and, as the TEAC reminds us by resorting to civil rules, it is “irrevocable”.
The organization recalls that the Civil Code establishes the irrevocability of the acceptance of an inheritance and underlines that only exceptional circumstances, such as a lack of consent (coercion, threat or manipulation to force acceptance) or the appearance of an unknown will, could allow its annulment. Therefore, once achieved, the status of heir is fixed and cannot be revoked through a subsequent renunciation, even if this is formalized with a public deed.
The Administration argues that the disposition of the deceased’s private funds consolidates the status of heir for tax purposes, and the court indicates that any conflict between tacit acceptance and renunciation must be resolved in civil court, since the decision is considered “irrevocable” at the inheritance level.
“These criteria constitute a serious warning for heirs who share bank accounts with the deceased: the disposition of funds from those accounts fueled by income attributable to the deceased can lead to tacit acceptance of the inheritance. And let’s remember that the acceptance and renouncement of the inheritance are irrevocable acts. Once the inheritance has been tacitly accepted, it cannot be renounced”, concludes De la Plaza.
