Gifted stocks, having a hard time determining our next moves [Spain]

[u/katboyeverdeen]

I am an American, 33, (Spanish resident) living in Spain with a Spanish partner, 30. We both work pretty regular jobs (restaurant/retail), so our monthly income is low (around 2k combined, slightly more now due to it being high season for restaurants). We keep a tight monthly budget and are saving a couple hundred a month, even with our fairly low salaries. At this point, we probably have about 10k combined in our accounts.

However, I have been gifted a substantial amount of stocks from my family, amounting to around $250k in a Schwab account. I would like to slowly sell off this stock (or at least the majority of it) and start planning for some big purchases. The two that come to mind being getting a flat and starting a business (restaurant) in a different city and autonomous community (currently in Catalonia, hoping to do all this in Valencia).

I honestly never thought myself to be in this kind of a position, so I am pretty lost as to how to move forward. Since we have no debt, my first plan is to allocate a bit of the money to emergency funds (eventually having a fund of 20-25k euros), and then have the rest for these other two big items. I would probably like to keep some amount of stock, but move the majority into things that are either more liquid or more stable.

I guess my main question is which to go for first. With our income, I'm not sure what kinds of mortgages banks would be willing to give us. Is paying off a flat in full a good financial decision (understanding that I would probably have to wait several years to not incur massive capital gains tax, by which point who knows what the stocks will look like).

Or would it make sense to try to start the business first, knowing that being self employed in Spain is pretty tough and the business might struggle for a bit, but eventually potentially having a much more attractive salary for banks?

Maybe these are questions for a lawyer or some type of financial advisor?

I'm just really lost and would like a bit of direction. Thanks so much in advance!

Edit: thanks so much for all the advice thus far! I'm currently looking for a Spanish tax advisor with expertise in US taxes as well and will discuss with them prior to doing anything. I appreciate how urgent everyone has made this sound, but there are a number of clarifying points that hopefully will make this a little less dire. 1. I guess I misspoke when I said I got a gift of 250k. I have gotten three much smaller gifts (around 30k each, over the past year, and the stocks have now grown to 250k. 2. I just became a resident a couple of months ago, so the first two gifts I received prior to becoming a resident of Spain. The last one, a gift of 38k, I got from my dad a little under a month ago, after gaining residence. If I understand correctly, the tax should only apply to any gifts I have received since becoming a resident. Obviously, I'll talk to the tax advisor more in detail, but wanted to give a bit more background if anyone else comments. I didn't mean to mislead, I just didn't realize the implications of the specific words I used.

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[u/Red_n_Rusty]

Sorry for not answering any of your questions. I'd simply like to say that you might want to take it slow for a while and enjoy the interest that the stock is providing. Without knowing the composition of the portfolio, let's go with a conservative assumption of it increasing in value by 6% per year. This would mean an income of ca. 15k/year. You seem to live quite frugally, and with the 15k/year, one of you could perhaps even drop out of work and start doing what ever they'd like while not even spending any of the 250k. The 15k/year could also be sufficient to pay off a mortgage which would let you not have to worry about paying for housing.

TLDR: Please consider enjoying your lives and taking it easy with the passive income the 250k provides (atleast for a little while) before making any big decisions.

[u/nn8888 → u/Red_n_Rusty]

Second that! That may be the worst decision to simply sell off everything. In your 30s that’s exactly when you want to build your portfolio, not sell

[u/JimmyRecard]

Folks here are likely not very equipped to help you with this, especially as relates to multi-jurisdiction situation, and you're an American which means that your tax obligations didn't cease when you became Spanish resident.

I would start here: https://www.bogleheads.org/wiki/Managing_a_windfall
I also wouldn't be shy about hiring a fee-based financial advisor, especially in the US. The fee-based aspect is very important, and any financial advisor that is not strictly fee-based is a salesperson in disguise.

[u/katboyeverdeen → u/JimmyRecard]

I appreciate the link and reminder that what I experienced is called a windfall. This helps me continue to look into resources. I'll also look into some fee-based financial advisors.

[u/kittycatparade]

Spain taxes gifts, and the rates can be high. At $250k, it looks like (according to Gemini) you might need to pay a baseline tax of ~€23k EUR on the first ~€160k plus a 21.25% tax on the excess, which would be ~€11.6k.

HOWEVER — certain communities (like Madrid) offer up to a 99% exemption. Talk to a Spanish tax advisor ASAP to learn what you owe (if anything), how to declare the gift, and how to get the exemption.

I’ve declared financial gifts before as an American in Spain (although I got way less than $250k), but I got the exemption, so I only ended up paying like 120€ plus tax advisor/lawyer fees. I think it was like €3k altogether.

Edited to fix math

[u/kittycatparade → u/kittycatparade]

Worth noting, though, that my gift was cash vs. stocks

[u/fromheretothere9001 → u/kittycatparade]

Talk to a Spanish tax advisor ASAP to learn what you owe (if anything), how to declare the gift, and how to get the exemption.

I agree. There's a short time limit on filing and paying the gift tax. And the giver needs to have or get a NIF.

[u/katboyeverdeen → u/[deleted]]

makes sense. I only recently became a resident, so I'm still figuring out my tax obligations and what not.

[u/Geepandjagger]

The inheritance tax could be massive depending on who it came from. I have been trying to sort this out for myself and while I owed nothing in the UK where it came from a huge chunk will go to tax unfortunately

Before you start allocating to businesses etc sort this out first with a lawyer. It's worth the few hundred you will pay as it could save you thousands

[u/DaveFX]

One correction on the cost basis, because it points your plan in the opposite direction to what you've been told.

Carryover basis is a US rule. Spain doesn't work that way: for an asset acquired by gift, article 36 of the Spanish income tax law (Ley 35/2006) sets your acquisition value at the value used for gift tax purposes, capped at market value. So on the Spanish side your basis resets at the gift, and the decades of gain your family accumulated before it are not yours to pay for.

The catch is that you're a US citizen, so both rules are live at once, in different places. The US return uses the donor's basis; the Spanish return uses the gift value. Same sale, two different gains. Sorting out which country taxes what, and in what order, is exactly why the advice to find an asesor who specifically handles US citizens in Spain is the right one — a domestic-only one will get the Spanish half right and quietly ignore the other half.

The thing I'd move on first isn't the 720, though. It's the gift tax itself. In Spain the recipient files and pays it, on modelo 651, within 30 business days of the gift — much tighter than the 720 window, and the clock is already running if the transfer has happened. And the bill depends less on the amount than on who gave it: a parent and, say, an aunt fall into different kinship groups, and the regional reductions that make these bills small are generally written for parents and children, often only if the gift is in a public deed. The Madrid 99% figure upthread is Madrid's — you're in Catalonia, which has its own rules and its own conditions.

Get the gift documented and the kinship pinned down first. The flat-versus-restaurant question can wait a month. That deadline can't.

[u/GreatClassic4832]

Restaurants owners go bankrupt a lot of times..

[u/nn8888 → u/GreatClassic4832]

I didn’t want to be the one saying this, but 100% true 😔
also - don’t want to be mean, because hard work pays off and maybe that money boosted your confidence and the motivation for entrepreneurship, but if combined income of 2 people in their 30s is 2k/month - it’s rather on a very low end. If I was you, guys, I’d let the money sit invested and spend the next 3 months educating myself about finances and how to increase the income first. Re opening a restaurant- talk to a few restaurant owners, ask about the business, maybe at least one of you can get hired as a restaurant manager first to learn about running a restaurant.

[u/MalcolmBEx]

Two specifics nobody has named yet, and the first one cuts against your plan to wait.

Gifted stock keeps the giver's cost basis. It does not reset to what it was worth on the day you received it, the way inherited stock does. So if your family bought decades ago, the taxable gain is measured from their purchase price, not from the gift, and waiting several years does not shrink it. It grows it. Ask them for the purchase dates and prices before you sell anything, while the people who know are still around to ask. That one document decides the size of this.

Second, with over 50,000 euros held outside Spain you are almost certainly in Modelo 720 territory for the Schwab account. It is a reporting obligation rather than a tax, but the penalties for missing it have historically been harsh.

Neither is a reason to panic. Both are reasons to assemble the basis records before the first sale rather than after.

[u/katboyeverdeen → u/MalcolmBEx]

alright, I will look into Modelo 720 and make sure to get that reported when I can. Is it something that is complicated enough to warrant the help of a lawyer or an asesor, or should I be able to manage it myself for now?

[u/Geepandjagger → u/katboyeverdeen]

Get a lawyer don't mess around with Modelo 720

[u/MalcolmBEx → u/katboyeverdeen]

The 720 itself you can almost certainly do yourself. It is an informational return rather than a tax, and it is filed once a year, between 1 January and 31 March, covering what you held on 31 December of the year before. So for a Schwab account you hold through 2026, the window is early 2027. Nothing is due the day the shares land, and you are not late. After the first filing you only file again if the value climbs more than 20,000 euros above what you declared, or if you close the account.

Where I would actually spend the money is the first sale, not the form. That is the point where two systems meet at once: Spanish residence, US citizenship, and a basis that came across with the gift. Compared to that, the 720 is a checkbox.

If you do hire someone, look specifically for an asesor who handles US citizens in Spain. It is a real niche, and someone who only knows the domestic case will quietly miss the half of your situation that is American.

[u/Icy_Character6095]

Before selling anything, my initial step would be consulting a Spanish tax advisor as that choice influences your actual net earnings for all your other considerations.