The Beckham Law and carried interest generated before the move to Spain: an analysis of binding ruling V5374-26

At a glance: carried interest deriving from points allocated before the move to Spain, where the allocation confers a vested right with no continued-service condition and the recipient performs no material activity after the closing of the transaction, is not treated as obtained during the application of the Beckham Law under article 114.2.a) RIRPF, and would be taxable in Spain only if it derived from personal activity carried out in Spanish territory. The ruling proceeds on the basis that the income is attributed to a year in which the regime applies, and does not examine what happens where payment occurs after the regime has ended.

Binding ruling V5374-26, issued on 28 July 2026, addresses a question arising with increasing frequency in the alternative asset management sector: the treatment, under the Beckham Law, of carried interest relating to transactions closed before the move to Spain, the amount of which is determined and paid afterwards. The reply is favourable to the taxpayer and technically consistent with the DGT's earlier doctrine. It is nonetheless worth examining the premises on which it is built and the questions it leaves unresolved, because on those depends whether the conclusion can be carried over to other cases.

The ruling is binding under article 89.1 of Law 58/2003, the General Tax Act. It binds the Administration in relation to the taxpayer who requested it and expresses the criterion applicable to cases presenting the same facts and circumstances. It is administrative doctrine, not case law.

Background and questions raised

The taxpayer, resident in the United Kingdom, works for the London subsidiary of a pan-European alternative asset manager with offices in several countries, including Spain. He holds less than one per cent of the group. The manager has asked him to lead the development of the Spanish market in investment and fundraising, for which he will sign a senior management contract with the Spanish entity. He intends to move to Spain, with his wife and minor children, during the second half of 2026.

His remuneration plan includes the allocation of points representing a percentage interest in the funds he has helped to form by identifying opportunities in the secondary market, attracting investors and executing transactions through to closing. The points are allocated through Luxembourg entities which group together the employees entitled to this remuneration and participate in the funds under management. In many cases the employee also contributes a premium funded from his own resources, the so-called investment interest.

Three elements of the description of facts are decisive for the reply. First, points are allocated transaction by transaction, at the closing of each investment. Second, once allocated, the points confer a vested right to the whole of the corresponding carried interest, with no continued-service condition, save in extraordinary cases of bad-faith termination. Third, after closing the taxpayer performs no active task in relation to the investment beyond monitoring it for internal reporting, since these are passive secondary-market investments managed by a third party.

The taxpayer raises two questions: whether the Beckham Law, the special regime under article 93 LIRPF, applies to him, and whether carried interest that becomes due and is paid after his move will be outside the scope of Spanish tax to the extent it relates to points allocated before the move.

Application of the regime

The first question is resolved in conventional terms. The DGT recalls the conditions of article 93.1 LIRPF and concludes that the taxpayer may elect the regime if he acquires Spanish tax residence in 2027 as a consequence of moving to Spain on commencing an employment relationship with a Spanish company, and satisfies the conditions in paragraphs a) and c) of the provision. The existence of the employment relationship, it notes, falls outside its competence.

Two observations. The first is that a senior management contract, as a special employment relationship, satisfies the requirement in paragraph b).1º, which is deemed met when an employment relationship, ordinary or special, other than that of professional sportspersons, is commenced. The second is that the reply places the acquisition of residence in 2027, although the move takes place in the second half of 2026. A move in the second half of the year does not generally result in presence of more than one hundred and eighty-three days in that year, so residence is acquired in the following one. The regime is available because article 93.1.b) itself allows the move to take place in the year preceding the first year of application. This is a frequent situation in practice and should be borne in mind when fixing the year of the election and counting the six tax periods for which the regime lasts.

Characterisation of carried interest and the rule in article 114.2.a) RIRPF

The reply to the second question proceeds in three steps.

The first is the general rule in article 93.2.b) LIRPF, under which all employment income obtained by the taxpayer during the application of the regime is deemed obtained in Spanish territory. This is the special feature that sets the regime apart from the ordinary taxation of non-residents and explains why an inbound worker's remuneration is taxed in Spain regardless of where the work is performed.

The second is the exception in article 114.2.a) RIRPF, which provides that income deriving from activity carried out before the date of the move, or after the notification of the end of the posting provided for in article 119.5 of the same regulation, is not treated as obtained during the application of the regime, without prejudice to its taxation where it is deemed obtained in Spanish territory under the consolidated Non-Resident Income Tax Act.

The third is the application of article 13.1.c).1º TRLIRNR, which treats as obtained in Spanish territory employment income deriving, directly or indirectly, from personal activity carried out in that territory.

On that structure, the DGT concludes that carried interest relating to points allocated before the move derives entirely from work performed before the move, falls outside the rule in article 93.2.b) by virtue of article 114.2.a), and would be taxable in Spain only to the extent it derived from personal activity carried out in Spanish territory.

The conclusion is consistent with the DGT's earlier doctrine. Ruling V1112-25 applied the same rule to the bonus relating to the year before the move. Ruling V0813-23 applied it to share plans with multi-year vesting, with the particularity that there the generation period spanned time worked before and after the move, which led to apportionment. In the present case there is no apportionment because, on the facts described, the activity generating the right ends at the closing of each transaction and the right vests at that same moment. The criterion underlying all three replies is the same: what matters is not the time of payment but the period and place of the activity generating the income.

It is worth noting that the reply implicitly characterises carried interest as employment income, by applying article 93.2.b) LIRPF and article 13.1.c) TRLIRNR to it. It does not dwell on that characterisation, which it takes as its starting point. The characterisation is consistent with the fifty-third additional provision of the LIRPF, introduced by Law 28/2022, which treats remuneration of this kind received by managers of alternative investment entities as employment income where certain conditions are met. The ruling does not mention that provision, and its relevance to the case is examined below.

The factual premises on which the conclusion depends

The reply is favourable because the facts are described in a precise way that makes it possible. It is worth identifying which elements of that description support the result, because their absence in another case would lead to a different conclusion.

The first is the vesting of the right at the time of allocation, with no continued-service condition. This is the most unusual element of the case. Most carried interest schemes include vesting periods, good leaver and bad leaver provisions and forfeiture on termination. Where the right depends on continued employment, the activity generating it does not end at the closing of the transaction but extends over the vesting period, and if part of that period falls after the move, the solution is not that of this ruling but the apportionment in V0813-23. The taxpayer has described a scheme in which vesting is immediate, and the reply relies on that.

The second is the absence of material activity after closing. The taxpayer states that, once the transaction is executed, he performs no active task beyond monitoring for internal reports, and that the investments are passive and managed by a third party. If the remuneration depended to any degree on active management of the portfolio, on participation in the exit or on value creation during the life of the fund, part of the generating activity would take place after the move, and in Spain, with the consequence that that part would fall within article 93.2.b) LIRPF.

The third is the location of the activity before the move. The conclusion of non-taxation is framed "to the extent that" the income does not derive from personal activity carried out in Spanish territory. The taxpayer worked in London, but he is to lead the development of the Spanish market, and it is not uncommon for a person taking on that role to have been involved previously in transactions with a Spanish component, travelling to Spain for their execution. If part of the activity that generated the points was carried out physically in Spanish territory, that part constitutes Spanish-source income under article 13.1.c).1º TRLIRNR and is taxable in Spain even though it predates the move. The words "directly or indirectly" in the provision further widen the reach of that connection.

All three are questions of fact. The burden of proving them rests on the taxpayer under article 105.1 of the General Tax Act, and the relevant documentation, the terms of the plan, the dated point-allocation letters, the vesting conditions, the description of post-closing duties and the record of where the work on each transaction was performed, should be assembled before the move, while it is available at the entity of origin.

What the ruling does not analyse

The reply states expressly that it proceeds on the premise that the carried interest is attributed to a tax period in which the taxpayer is taxed under the special regime. That premise is not a minor one.

Employment income is attributed to the period in which it becomes due, under article 14.1.a) LIRPF. Carried interest becomes due when the fund exits, which in alternative asset funds may occur many years after the closing of the transaction. The regime under article 93 lasts for a maximum of six tax periods. If the exit and the entitlement occur after the regime has ended, the taxpayer is taxed as an ordinary resident on worldwide income under article 2 LIRPF, and the exclusion in article 114.2.a) RIRPF, which operates only during the application of the regime, no longer protects the income. In that scenario, carried interest generated before the move would be taxed in full in Spain as employment income, subject to whatever follows from the Spain-United Kingdom treaty and to any tax the United Kingdom may levy on the same income. The ruling does not address this question because it was not asked, but it is the question that in practice determines the economic outcome, and the timing of exits relative to the duration of the regime is not within the employee's control.

Second, the ruling does not distinguish between carried interest properly so called and investment interest, the premium the employee contributes from his own funds to the Luxembourg vehicle. The return on that contribution is not employment remuneration but investment income or a capital gain deriving from a holding in a non-resident entity, that is, foreign-source income which is not taxed in Spain during the application of the regime regardless of when it was generated. The separation between the two components, which the Luxembourg vehicle may not reflect immediately, has direct consequences for taxation and should be documented.

Third, the ruling does not address the fifty-third additional provision of the LIRPF. That provision provides, for remuneration of this kind meeting its conditions, for partial inclusion in the taxable base. The question arises whether that rule, which belongs to ordinary personal income tax, applies to a person taxed under the special regime, whose liability is determined under the rules of the Non-Resident Income Tax Act with the special features of article 93.2. The question is relevant to the carried interest generated during the application of the regime on the transactions the taxpayer closes from Spain, which will be taxed in full as employment income obtained in Spanish territory under article 93.2.b) LIRPF. It is not the subject of this ruling, but it forms part of the same analysis.

Assessment

As to what it decides, the reply is correct, and it fits coherently within the line the DGT has maintained since ruling V0813-23. The criterion of looking to the period and place of the generating activity, rather than to the time of payment, is the one that follows from article 114.2.a) RIRPF and the one that best accords with the purpose of the regime, which is to tax in Spain the remuneration for work performed from Spain and not to draw into Spanish taxation income whose cause lies entirely before the move.

It is open to question, however, that the reply merely reproduces the taxpayer's premises without noting their exceptional character. A carried interest scheme with immediate vesting and no continued-service condition is not the norm in the sector, and anyone reading the ruling as a general rule applicable to any carried interest predating the move will make an error of scope. The reply would have been more useful had it indicated that, where vesting periods or forfeiture provisions exist, the applicable solution is apportionment.

It is also open to question that the caveat on timing of attribution is framed as a methodological premise rather than as what it is, the condition on which the effectiveness of the conclusion depends. The non-taxation the ruling recognises is temporary. It lasts as long as the regime lasts, and the time at which carried interest becomes due is not within the taxpayer's control.

Concluding observations

Ruling V5374-26 confirms that carried interest generated by transactions closed before the move, where the right vests at closing with no continued-service condition and there is no material subsequent activity, is not taxed in Spain during the application of the Beckham Law save to the extent that the generating activity was carried out in Spanish territory. It is a favourable conclusion, technically well founded and consistent with earlier doctrine.

Its application to other cases requires verifying that the same premises are present, and its economic effectiveness depends on the entitlement arising within the period of application of the regime. For anyone planning a move in these circumstances, the relevant work consists in obtaining before the move the complete documentation of the remuneration scheme and of where the work on each transaction was performed, in separating carried interest clearly from investment interest, in identifying which transactions have a pre-move Spanish component, and in modelling the expected exit timetable against the six years for which the regime lasts. Where that timetable extends beyond the regime, the analysis must be extended to the treatment of the income under ordinary personal income tax and to its coordination with United Kingdom taxation, because it is there, and not in the ruling, that the final tax on that carried interest will be decided.

Lullius is a tax boutique based in Palma de Mallorca specialising in international tax, private wealth and tax litigation. The authors contributed the Spain chapter to the tax litigation guides of both Chambers and Partners (Tax Controversy 2026) and The Legal 500 (Tax Disputes Comparative Guide 2026).

Legal notice. This article is provided for general information only. It reflects the position as at September 2026 and does not constitute legal or tax advice, nor does it create a lawyer-client relationship. No action should be taken, or refrained from, on the basis of its content without specific professional advice on the particular facts. Lullius accepts no responsibility for any loss occasioned by reliance on this material.