A ruling from the Supreme Court of Justice of the Balearic Islands dated as of 4 May 2020 rules on the implications of children using parents’ bank accounts as an authorised party.

Both the tax inspection body and the first instance court (non-judiciary) deem that the use by a son or daughter of an account held by parents should be taxed on the latter’s personal income tax as a capital gain.

The court states that transfers between certain family members, such as parents and children, are to be considered as a gift; hence the use of a bank account would not trigger any personal income tax but a donations tax.

The above legal presumption at the case in hand was also strengthened by the particulars of the case since the son had no other income, was the only son and had been appointed as the sole heir of his mother’s estate.