If you are an American living in Spain and regularly transfer money from your U.S. bank account to your Spanish account, you may assume:

“It’s my own money — there shouldn’t be a tax issue.”

In principle, that is correct.

However, recent Spanish Supreme Court rulings (27 November 2025) have significantly strengthened the evidentiary requirements to avoid a reassessment for “unjustified capital gains” under Spanish Personal Income Tax (IRPF).

And this is where many expats face unexpected risk.

Why Can This Become a Tax Issue?

Under Article 39 of the Spanish Personal Income Tax Act (LIRPF), if the Spanish Tax Authorities detect an increase in assets that is not properly justified, they may presume it to be undeclared taxable income.

A transfer from abroad into a Spanish bank account may trigger:

• Automated banking reporting

• Tax audit scrutiny

• Requests for proof of origin

Even if the funds are legitimately yours.

The burden of proof is on you.

The Supreme Court’s “Triple Evidence Test”

To rebut the presumption, you must prove three elements:

1️⃣ Objective Origin – How the Money Was Transferred

You must show:

• The specific U.S. bank account

• The transfer order

• The traceable movement into your Spanish account

The funds must be fully traceable from origin to destination.

2️⃣ Subjective Origin – Who Owned the Funds

You must demonstrate:

• That the U.S. account is yours

• That the funds legally belonged to you

• That there is no hidden third-party transfer

This becomes especially relevant if:

• The U.S. account is joint

• Funds were deposited by family members

• You operate through an LLC or corporation

• The account is held in trust structures

3️⃣ Legal Cause – Why the Money Exists

This is where many expats misunderstand the risk.

Spanish tax authorities may ask:

• Was this previously taxed income?

• Was this a gift?

• Was this a loan?

• Was it business income?

• Was it capital gains?

If the money represents:

• A gift from a relative → Spanish Gift Tax may apply

• A loan → it must be properly documented

• Undeclared prior income → IRPF exposure exists

Simply saying “it’s savings” is no longer sufficient without documentary support.

Common Risk Scenarios for U.S. Clients

We regularly see issues in situations such as:

• Transferring accumulated U.S. savings without documentation

• Moving funds from a U.S. LLC to a personal Spanish account

• Receiving financial help from parents in the U.S.

• Moving money from joint accounts

• Transferring proceeds from property sales or investments

Without structured documentation, the Spanish Tax Agency may classify the inflow as an unjustified capital gain.

Key Takeaways for U.S. Expats in Spain

If you transfer money from the U.S. to Spain:

• Keep bank statements from both jurisdictions

• Maintain proof of ownership of the U.S. account

• Document the source of accumulated funds

• Formalize loans properly

• Report gifts correctly

• Ensure prior U.S. income was properly declared in Spain if you are tax resident

Remember:

Spain taxes worldwide income if you are a Spanish tax resident.

The fact that funds originate in the U.S. does not make them automatically safe from scrutiny.

Final Thought

The Supreme Court’s doctrine makes one thing clear:

In Spain, tax defense is about documentation and traceability — not explanations.

For U.S. expats, cross-border transfers must be structured carefully to avoid unnecessary tax exposure.

If you are moving funds between the U.S. and Spain, proactive legal review can prevent costly reassessments.