• By Elisabeth SANCHO
• 23-03-2018

The economic benefit for work reasons from a fiscal point of view

The economic benefit for work reasons is regulated in article 1438 of the Spanish Civil Code and in the autonomous legislation, as for example, Article 232.5 of the Catalan Civil Code, and consists of that benefit that will be entitled to receive that of the spouses who has worked for the home substantially more than the other or has worked for the other without compensation or with insufficient compensation, as long as the other spouse has obtained a higher patrimonial increase thanks to that dedication. Do not confuse it with the compensatory pension, which is a different legal figure.

Its main characteristics are the following:

• It can take place in case of separation, divorce, marriage annulment or death.
  
  
• It is necessary to present inventory in the Family Procedure.
  
  
• Its amount is limited to a quarter of the difference between the increases of the spouses. 
  
  

The calculation of the amount that can be claimed for such benefit will be based on the final patrimony (rupture moment) discounting the debts that exist, the donations received by the marriage and the initial patrimony (moment of contracting marriage). The attributions made to the spouse must also be discounted.

Therefore, for the calculation of the benefit, neither privative goods or those acquired at the mercy of those, neither the capital gains of the goods by the passage of time (that is, if they increase in value) nor market oscillations have to be considered; being that they should be taken into account and computed to that effect:

• Capital gains on investments, administration or conservation on separate property (the increase in value for work, business activity, etc.), carried out by constant marriage.
  
  
• Depreciation of the mortgage on separate property.
  
  
• The shares, having to provide an expert appraisal of real value, not nominal.
  
  
• The capital increase of private companies.
  
  
• Donations that are valued at the date of donation, but then discounted by the value they have at the date of termination of the economic regime. 

In the extinction of the economic regime of separation of assets there is no capital gain when by legal imposition or judicial resolution there are compensations, monetary or by adjudication of goods, for a cause other than the compensatory pension. Therefore, when we are faced with an assumption in which the payment of an economic benefit has been agreed for work, it will not be taxed for the recipient of the benefit nor will the person who pays it be able to deduct it in the rent. 

In the event that the economic benefit for work reasons is paid through the delivery of a real estate, because although as noted above there will be no capital gain and, therefore, will not be taxed for the recipient of the benefit or the payer may deduct it; it is important to take into account the so-called latent surplus value that occurs when the person receiving the real estate in the future sells it to a third party, since for that difference in value the person who receives the economic compensation for work will have to pay.

In this sense, Sentence 4532/2016 of June 27 of the Superior Court of Justice of Catalonia has established the bases for the calculation of the benefit when the marriage had been bought a house for equal undivided halves, but with the peculiarity that the money for said sale would have come from only one of the spouses:

• The value of the property acquired by both spouses is computed for the amount resulting from the date of termination of the economic regime, that is, for half of its amount in the assets of each of them, even if it has been paid or satisfied by only one, at the moment of cessation of coexistence or extinction of the regime. 
  
  
• The money for the acquisition of the property by both is added fictitiously in the patrimony of the donor by means of its payment by only one of them, computed at the time of the donation (of acquisition of the property), as a result of which a donation was made a certain amount for the acquisition of a property.
  
  
• The same amount of money of the patrimony of the recipient spouse is deducted, as free purchase, without difference if said acquisition comes from inheritance, donation from the third party or from the spouse himself.
  
  
• Once the economic benefit has been calculated, the creditor's payment on account is taken into account, the amounts received by the marriage, for the value they have at the date of termination of the regime. 

Notwithstanding the foregoing, it is important to remember that it is in accordance with the law that, in anticipation of a marital breakdown or dissolution of marriage due to death, the increase, reduction or exclusion of economic compensation for work can be agreed between the spouses. Said agreement must be granted in matrimonial chapters or in public deed.

As it is to see, both in the negotiation of a regulatory agreement or in a contentious procedure of divorce, separation or annulment as well as in the cases of death, when we are facing the compensatory benefit due to work, and if nothing has been agreed upon otherwise, we must make the corresponding inventory of assets, debts and charges, determine which of them must or not be computed for the purpose of calculation, all in accordance with the provisions of Article 232-5 and following of the Catalan Civil Code.

Do you need our lawyers to assess the viability and amount of the benefit for work reasons? Contact our office or use any of the online legal services you will find on our website.