Recent developments

Have there been any notable recent developments in the provision of private client and offshore services in your jurisdiction, including any regulatory changes or case law?

The Colombian tax system has undergone significant changes in the past eight years – most recently with the enactment of Law 1819/2016 implementing the foreign-controlled corporations regime and its further interpretation by the Colombian Tax Office (DIAN) through Tax Ruling 09193/2018.

Additionally, in Tax Rulings 34071/2017 and 13287/2018 DIAN determined the main tax consequences to be considered by a taxpayer that is a settlor, contributor, beneficiary or designated third party of a foreign trust.

Further, in Tax Ruling 76353/2018 DIAN confirmed that it is possible to perform extemporary tax amnesty filings or amendments thereto by paying the applicable tax, penalties and interests.

Individual taxation

Residence and domicile

How is residence/domicile determined for tax liability purposes in your jurisdiction?

Tax residence is determined as follows:

  • An individual is considered a resident for tax purposes when he or she remains in the country, continuously or discontinuously, for more than 183 calendar days during a period of 365 days.
  • If the individual remains in the country continuously or discontinuously for 183 days during two consecutive fiscal years, the individual will become a resident after the second of the two consecutive years.
  • Colombian citizens are considered residents if their family members (ie, spouse or dependent children) are Colombian residents, or if 50% or more of the individual's income is of a Colombian source, or if 50% or more of the person's assets are managed or held in Colombia. A Colombian citizen will also be considered a tax resident in Colombia if he or she has tax residence in a tax haven.

Income

Describe the income tax regime in your jurisdiction (including tax base, rates, filing formalities and any exemptions, reliefs or deductions).

Individual income tax rates are determined according to income baskets and residence status. Losses can be offset only against the same type of income. The rates for each type of income are as follows:

Labour income

Pensions

Capital income

Non-labour income

Dividends

0%-33% for residents

35% for non-residents

0%-33% for residents

35% for non-residents

0%-35% for residents

35% for non-residents

0%-35% for residents

35% for non-residents

0%-10% plus an additional 0%, 5% or 10% for dividends paid out of taxed profits at the corporate level, or 35% plus an additional 0%, 5% or 10% for those paid out of untaxed profits or from a foreign entity

5% for non-residents for dividends paid to them out of taxed profits at the corporate level, or 35% plus 5% on the distributed dividend (net of the 35% initial tax)

The following exemptions, reliefs or deductions are available:

 

Revenues not considered as income

Mandatory health and pension contributions made by employees

Voluntary contributions to pension funds and AFC accounts (savings accounts for housing purchase)

 

 

Deductions

Payments of interests derived from loans destined to housing purchase

Payment of pre-paid health services and health insurance payments

10% of all labour payments made to individuals who are dependent from the taxpayer (ie, children who have not reached legal age, children who have reached legal age but are being financed in a recognised educational institution and children over 23 years of age who are dependent due to physical or psychological incapability)

Exempt income

25% if the individual's labour is considered as exempt income

The abovementioned tax benefits may be applied as long as they do not exceed 40% of any income received or 5,040 tax value units (UVTs) (approximately ¢60,000).

Further considerations are that:

  • joint returns (husband and wife) are not acceptable under Colombian tax law; and
  • the taxable period is annual and coincides with the calendar year.

Capital gains

Describe the capital gains tax regime in your jurisdiction (including tax base, rates, filing formalities and any exemptions, reliefs or deductions).

'Capital gains’ are defined as extraordinary gains – that is, gains that are not obtained by a taxpayer as a result of the activities that he or she ordinarily carries out. The activities that trigger capital gains are specifically listed in the Colombian Tax Code:

  • gains from the sale of fixed assets that have been owned by the taxpayer for a term of two or more years;
  • profits obtained in the liquidation of legal entities, and that do not correspond to undistributed profits or reserves;
  • gains resulting from estates, legacies and donations (gifts); and
  • prizes, awards, lotteries and gambling earnings.

The tax rates applicable to capital gains is 10%, provided that a holding period of two years has been reached (except for gains resulting from estates, legacies and donations). 

As an exception, gains from lotteries, draws and gambling are subject to a flat rate of 20%.

Inheritance and lifetime gifts

Describe the inheritance and gift tax regime in your jurisdiction (including tax base, rates, filing formalities and any exemptions, reliefs or deductions).

Inheritances, gifts and donations are subject to capital gains tax in Colombia at a 10% rate. The transfer of any real estate involved would also trigger registry tax (of approximately 1.5%).

As a general rule, the applicable taxable base shall be the assets or rights’ registered value as of 31 December of the previous year.

The following extraordinary income is considered as exempt for capital gains purposes:

  • the equivalent to 7,700 UVT (approximately $90,000) of the deceased's urban property;
  • the equivalent to 7,700 UVT (approximately $90,000) of the deceased's rural property excluding recreational housing;
  • the equivalent to 3,490 UVT (approximately $40,000) of the value inherited by the deceased's surviving spouse and heirs;
  • 20% of assets or rights received by individuals not considered as heirs or surviving spouse;
  • 20% of assets or rights gifted or transferred by the deceased during their lifetime that were received gratuitously by a beneficiary without exceeding 2,290 UVT (approximately $26,000); and
  • any books, clothing, personal belongings and furniture belonging to the deceased.

Real estate

What taxes apply to individuals’ acquisition and disposal of real estate in your jurisdiction?

The transfer of immovable property triggers the following taxes:

  • Transfer tax – there is no transfer tax; however, the net gain on the sale of real estate is taxed as income or capital gains, depending on the holding period of the real estate. If held for two years or more, the gain is treated as a capital gain subject to capital gains tax at a rate of 10%. If held for less than two years, the gain is treated as taxable income subject to income tax rates as follows:
    • for residents individuals, at income tax progressive rates (0%-35%); and
    • for non-residents individuals, at 35%.

The transfer of immovable property is also subject to notary fees and registry taxes at 0.3% and 1.5% (including notary fees) of the purchase price, respectively.

  • Value-added tax (VAT) – the acquisition of new housing with a purchase price of over 26,800 UVT (approximately $310,000) is subject to VAT at a 5% rate.

Non-real estate assets

Do any taxes apply to the acquisition and disposal of other assets apart from real estate?

The acquisition and disposal of assets other than real estate trigger VAT. As a general rule, the import of goods into the country and the sale of goods are subject to VAT at a 19% rate.

Other applicable tax regimes

Are any other direct or indirect tax regimes relevant to individuals?

VAT

VAT is levied on the importation of goods into the country and on the sale of goods and the rendering of services when the direct user or recipient of such services is a Colombian resident for tax purposes. Certain goods (livestock, certain fruits and vegetables, seeds and others) and services (catering services for companies, food preparation services, bar services) are excluded from VAT. The general rate is 19%, but there are certain goods and services subject to a 5% rate (coffee, corn for industrial use, agricultural machinery, pre-paid medicine plans, security services and temporal services).

Stamp tax

Stamp tax was levied on written documents, including securities, executed in Colombia or abroad but with effects inside Colombia, whereby obligations are created, modified, assigned, extended or terminated, whenever their value exceeds 6,000 UVT (approximately $60,000).

The 2006 Tax Reform provided for a gradual reduction of the stamp tax rate. Thus, since 1 January 2010 individuals are no longer required to pay stamp tax for written documents executed during the year 2010 and thereafter. Accordingly, the stamp tax rate is currently 0%.

Industry and commerce tax

A municipal tax is triggered on revenues derived from the performance of industrial, service and commercial activities within a Colombian municipality. The tax is triggered on gross income, excluding revenues for exports, proceeds from the sale of fixed assets, refunds, subsidies and withholdings.

Municipal treasurers and finance secretaries are the authorities responsible for collecting and managing taxes. The rate is set by each municipality, according to the following limits established by law:

  • industrial activity is taxed at rates between 0.2% and 0.7%; and
  • commercial and services activity is taxed at rates between 0.2% and 1.0% – Bogotá has special rates that go up to 1.38%.

Income tax withholding

As a mean to collect income taxes in advance, Colombian law establishes a system of income tax withholdings that requires every person making payments to a taxpayer to withhold a certain percentage, depending on the tax being paid. For those who must file an income tax return, all amounts withheld or self-withheld are a prepayment of the final tax liability and as such are credited on their return.

Planning considerations

Are there any special tax planning considerations for individuals with a link to your jurisdiction?

This must be analysed on case-by-case basis. It is always advisable to analyse the ultimate beneficial owner's (UBO) applicable tax rules according to the UBO's tax residence and the situs assets' tax rules.

Trusts, foundations and charities

Trusts

Are trusts legally recognised in your jurisdiction? If so, what types are available and most commonly used?

Colombian civil law does not provide rules on common law trusts. However, Colombian law sets out rules on civil and commercial trust agreements whereby a settlor transfers the property or administration of certain assets to a trustee in exchange for fiduciary rights. The trustee is responsible for managing such assets or transferring them to a third party in order to carry out the purpose determined in the local trust agreement, either for the benefit of the settlor or a third party. The local trusts should not be confused with the Anglo-Saxon or common law trust.

Local trusts are commonly used in Colombia as instruments to administer properties or businesses with a specific purpose or to grant guaranties or collaterals, considering that trustees are professional regulated entities.

What rules and procedures govern the establishment and maintenance of trusts?

Local trusts

In Colombia, only companies that are duly authorised by the Colombian financial authority (SFC) may offer trust services and act as trustees. Such entities are subject to SFC supervision and regulation.

Colombian law sets out a number of legal duties for trustees, which cannot be delegated to third parties or waived. These duties include the following:

  • trustee activities must be carried out in a diligent manner;
  • assets must be segregated;
  • assets in a  trust must be managed in accordance with a trust agreement;
  • trustees must act on behalf and for the benefit of the beneficiaries;
  • trustees must consult the SFC when in doubt about their duties or when they deem it necessary to act against the instructions set out in the trust agreement;
  • trustees must make every effort to maximise a trust's profitability;
  • upon the trust's termination, trustees must transfer the assets to the final beneficiary set out in the agreement; and
  • trustees must report accounts at least every six months.

Common law trusts

There are no civil or commercial regulations regarding the establishment of a common law trust in Colombia. Accordingly, common law trust is not recognised by Colombian civil or commercial law.

How are trusts taxed in your jurisdiction?

Local trusts

Colombian tax law treats local trusts as flow-through entities for tax purposes. Thus, trusts must determine their profits annually and the beneficiaries have to include such profits in their own income tax returns for that same year and pay the relevant taxes.

The title to the assets that an individual contributes to the trust fund must pass to the trust fund (exceptions apply – for example, for the guarantee trust) or otherwise such assets would have to be declared by the individual as part of his or her equity and thus be subject to net worth taxes.

Additionally, if the individual receives fiduciary rights over the trust fund because of said contribution, he or she would be obliged to report such rights for Colombian income tax purposes.

Whenever the settlor or any of the beneficiaries receive income from the trust, they must pay the relevant taxes in Colombia. Income tax regulations establish that the results of any activities of the trust and all equity increases must be reported in the income tax return of the beneficiaries.

Trusts are used in Colombia as an instrument to administer properties or businesses or to grant a warranty, considering that trustees are professional entities. In the case of successions, trusts are used to administer the estate of certain heirs until they can do so themselves.

Foreign trusts (only for tax purposes)

The Colombian Tax Office (DIAN) analysed the formal and substantial obligations applicable to tax resident beneficiaries of foreign irrevocable and discretionary trusts. DIAN concluded the following in Tax Rulings 34071/2017 and 13287/2018:

  • Only if a Colombian tax resident has the economic benefits of a trust's underlying assets must the tax resident comply with all formal and substantial tax obligations derived from such assets.
  • Regardless of their status as trust's beneficiaries, Colombian tax residents that receive a distribution, income or benefit from a foreign trust must report such distribution, income or benefit in their income tax return, regardless of whether they enjoy the economic benefits from the trust's assets or not.

To date, DIAN has made no further remarks on the discretionary powers that may be exercised by a trustee in an irrevocable foreign trust, and it determined that each case must be analysed on a standalone basis. Further developments in this area are expected.

Foundations and charities

Are foundations and charities legally recognised in your jurisdiction? If so, what forms can they take?

National or foreign individuals and legal entities may incorporate corporations, associations or foundations in Colombia. Corporations and associations imply the union of individuals who wish to develop a social benefit activity. Foundations are characterised as the union of assets dedicated to a social benefit activity.

What rules and procedures govern the establishment and maintenance of foundations and charities?

Foundations are incorporated either through a private document or a deed of foundation, with compliance of requirements established by law. These must be registered before the chamber of commerce of the entity’s domicile. The governor of the corresponding jurisdiction (or the mayor, in the case of Bogota) exercises surveillance and control over foundations. Specific documents must also be filed before these entities.

How are foundations and charities taxed?

Foundations and charities are taxed in Colombia as follows:

  • As a general rule, non-profit corporations, foundations and associations are subject to the general tax regime and are subject to income tax at a 33% rate (plus a surcharge of 4% for 2018).
  • However, the Colombian Tax Code establishes that non-profit corporations, foundations and associations are subject to a special tax regime with respect to income tax and complementary taxes provided always that they comply with the following conditions:
    • they are incorporated according to Colombian law;
    • their main purpose and resources are destined to health, sports, formal education, culture, scientific or technological, ecological research, environmental protection or social development programmes;
    • such activities are of general interest;
    • their capital contribution and/or surpluses cannot be distributed; and
    • their surpluses are totally reinvested in the activity of its corporate purpose and such corporate purpose corresponds to the activities mentioned in the preceding clause.

Entities that comply with the aforementioned requirements could be considered as entities of the special tax regime, with DIAN’s approval.

  • Entities approved by DIAN as eligible for the special tax regime are subject to income tax at a 20% rate. However, any income surplus is considered as exempt, provided that the funds are destined directly or indirectly for programmes that develop the entity's social purpose and meritorious activities. Any excess benefits or surplus that are not reinvested in programmes that develop the entity's social purpose are deemed as taxable for the next fiscal year.

Compliance issues

Anti-avoidance and anti-abuse provisions

What anti-avoidance and anti-abuse tax provisions apply in the context of private client wealth management?

According to Article 869 of the Colombian Tax Code, ‘abuse’ implies the use or implementation of any type of artificial legal act or business with the purpose of obtaining a tax advantage or benefit such as tax eliminations, reductions, deferrals, exemptions, credits and tax losses.

If the Colombian Tax Office (DIAN) detects structures or operations that are artificial, it may re-characterise the operations, with the purpose of finding the true nature of the apparent legal act or business and applying the corresponding tax treatment.

There is artificiality and lack of business purposes when:

  • the act or business is not reasonable from an economical and/or commercial perspective;
  • the act or business translates into a substantial tax benefit that does not reflect the economic and business risks assumed by the taxpayer; or
  • the execution of the act or business is apparently correct, but its content hides the true will of the parties.

Anti-money laundering provisions

What anti-money laundering provisions apply in the context of private client wealth management (eg, beneficial ownership registers)?

Tax evasion is not considered money laundering in Colombia. However, Article 434(a) of the Criminal Code determines that the wilful omission of assets or including non-existent liabilities in an amount exceeding COP5,664,004,500 (approximately $1.9 million) is a criminal offense subject to imprisonment of four to nine years and a fine equivalent to 20% of the omitted assets' value, assets reported inaccurately or the non-existent liability amount. To extinguish the criminal liability, taxpayers are given the opportunity to voluntarily file or amend their tax returns and provide applicable tax payment.

Wills and probate

Succession rules

What rules and restrictions (if any) govern the disposition of and succession to an individual’s property and assets in your jurisdiction?

By executing a will, a person may freely dispose of only part of their estate, which normally is one-fourth. The Civil Code contains compulsory portions that cannot be circumvented by will.

Colombian rules on forced heirship are mandatory and apply to the estates of all individuals (nationals and foreigners) who die with their last residence in Colombia. Colombian resident heirs and foreign heirs have the same rights and, thus, are entitled to equal treatment in Colombian probate proceedings. The Civil Code forces the testator to assign certain compulsory portions, even against his or her will.

The following are the compulsory portions:

  • maintenance provided by law;
  • the marital portion;
  • the legitimate; and
  • the fourth of improvements in the succession for the descendants.

‘Maintenance provided by law’ is owed in an amount for the subsistence of the beneficiary in a way that corresponds to his or her standard of living. Individuals entitled to maintenance include the spouse, descendants, ancestors and siblings. The amount of maintenance will be assessed by a judge.

The ‘marital portion’ is the portion of the estate that the law assigns to the surviving spouse or permanent partner lacking the necessary means for a congruent subsistence. Taking into account the existence of any legitimate descendants, the widower or widow will be counted among the children and receive as marital portion a share equivalent to the legitimate rigorous corresponding the legitimate descendants.

The ‘legitimate’ is that part of the estate of a deceased individual that the law assigns to the legal heirs. The following are legal heirs: children (personally or represented by their descendants) and ancestors. The legitimate is obtained by dividing half of the inheritance between all legitimate descendants and the widow or widower. The legal heirs converge to the succession and are excluded and represented according to the order and rules of the intestate succession.

The ‘fourth of improvements’ is the portion that the law designates to increase the portion of the descendants. The testator may, at their discretion, favour the descendant or descendants that they prefer assigning this portion in the proportion desired. This is the only use allowed to the fourth of improvements. Should there be no legitimate descendants entitled to inherit this fourth part of the inheritance, it will increase the freely disposable portion.

If there were no descendants, the deceased’s estate shall be divided in four parts: two of them as the estate to be assigned to the legal heirs, one fourth as improvements and the other fourth to be used by the testator at his or her free will.

Intestacy

What rules and procedures govern intestacy?

Colombian rules on forced heirship are mandatory and apply to the estates of all individuals (nationals and foreigners) who die with their last residence in Colombia. For this reason, there are no specific rules and procedures governing intestacy in Colombia (unlike many common law jurisdictions).

Governing law

What rules and restrictions (if any) apply to the governing law of a will?

The following rules and restrictions apply:

  • the last residence of the deceased determines the succession's applicable law; and
  • if the law governing the will is Colombian law, one should bear in mind that the testator is free to assign its properties to his or her legatees, but must consider the compulsory portions. Such portions are the part of the estate that, according to the forced heirship law, go to the forced heirs.

Formalities

What are the formal and procedural requirements to make a will? Are wills and other estate documents publicly available?

Solemn and nuncupative wills shall be executed before a notary and three witnesses. Their essential element is that the testator discloses their provisions to the notary and the witnesses.

The notary will state on the cover, under the epigraph, that the testator is of sound mind, and mentions his or her full name, domicile, names of the witnesses, and the place and exact date of the grant. Lastly, the testator, the witnesses and the notary will sign the cover. If the testator is unable to sign at the time of the grant, a person other than the instrumental witnesses shall sign.

Validity and amendment

How can the validity of a will be challenged? Can the will be amended after the decedent’s death?

Under Colombian law, a valid will may not be amended after the deceased's death. The validity and content of a will can be challenged for various reasons, such as the deceased's lack of capacity or the existence of an heir that was not included in the deceased's inheritance as a rightful heir under Colombian law. Colombian succession law determines that the testator may freely assign only part of his or her inheritance. Thus, if the testator does not respect the compulsory portions, the judge can still apply the will and change its content in order to assign to the heirs the portions that they are legally entitled to under Colombia's mandatory heirship laws.

How is the validity of a will established in your jurisdiction?

Colombian law recognises two types of will:

  • the solemn and nuncupative will; and
  • the solemn sealed will.

Solemn and nuncupative will

The solemn and nuncupative will must be executed before the notary and three witnesses. Its essential element is that the testator discloses its provisions to the notary and the witnesses.

It may have been previously written but shall nevertheless be read aloud by the notary.

Lastly the testator, the witnesses and the notary execute the will. If the testator cannot sign, this circumstance shall be mentioned in the testament stating the cause.

Solemn sealed will

The solemn sealed will shall be executed before a notary and five witnesses. Its essential element is the act by which the testator presents to the notary and the witnesses a closed deed. The testator has to declare, in a way that the notary and the witnesses see, hear and understand, that the said deed contains its will.

The will shall be executed by the testator. Its envelope shall be closed or externally closed, so that it cannot be extracted without breaking the envelope. It is up to the testator to place a seal or mark, or to use any other means to secure the envelope. The notary will state on the envelope, under the epigraph that the testator is of sound mind, his or her full name, domicile, names of the witnesses, and the place, and exact date of the grant. Lastly, the testator, the witnesses and the notary will sign the envelope. If the testator is unable to sign at the time of the granting, a person other than the instrumental witnesses shall sign.

To what extent are foreign wills recognised? Do any special rules and procedures apply to establishing their validity in your jurisdiction?

Foreign wills are recognised by Colombian law provided that:

  • the will is dully is authorised before a Colombian consulate;
  • witnesses of the will are domiciled in the location where the will is granted; and
  • the rules of a solemn will under Colombian law are observed.

Estate administration

What rules and procedures govern:

(a) The appointment of estate administrators?

The administration of the estate shall be carried out through an estate executor.

(b) Consolidation and administration of the estate?

Under Colombian law, an estate executor is designated to administer the assets and insure the fulfilment of the deceased's last will. The estate executor must accept such designation; however, if an executor is not designated, the heirs are in charge of administering the estate. 

(c) Distribution of the estate to heirs?

Colombian law distinguishes between different orders of heirs in an intestate succession. Succession orders or levels determine who inherits and in which proportion. One level excludes the others. The following table sets forth the different orders of heirs in an intestate succession:

Order of heirs

Proportion

Descendants: biological and adopted

Descendants inherit equal portions and not including the surviving spouse's marital portion

Ancestor and surviving spouse: ancestors of nearest degree exclude the others

In this order, heirs inherit per capita along with the surviving spouse, who receives the marital portion

Siblings and surviving spouse

The inheritance is divided into two parts, one for the brothers and sisters that receive equal portions and one for the spouse

Children of brothers and sisters

Equal portions

The state through Colombian Family Welfare Institute

The entire estate

(d) Settlement of the decedent’s debts and payment of any taxes and fees?

The settlement of the deceased's debts and payments of taxes apply as follows:

  • The administrator of the estate is required to hold the estate assets under deposit. When the inventory and appraisals of the estate are final, the administrator may sell the deceased's assets in order to cover any debts or payment of any taxes and fees.
  • The unsettled estate is subject to income tax at a 33% rate until the inheritance is finally distributed to its heirs. Estate executors are required to comply will all formal tax obligations (eg, filing tax returns) and to pay all outstanding taxes.
  • Once the inheritance is distributed among all heirs, such distribution is subject to capital gains tax at a 10% rate. However, in some cases part of the inheritance may be considered as exempted income.

Planning considerations

Are there any special considerations specific to your jurisdiction that individuals should bear in mind during succession planning?

This must be analysed on a standalone basis.

Capacity and power of attorney

Loss of capacity

What rules, restrictions and procedures govern the management of an individual’s affairs where he or she loses capacity and the grant of power of attorney in such cases?

Under Colombian law, any individual is subject to legal rights and obligations except for individuals deemed to be incapable by a Colombian judge after a medical evaluation and due process.

An individual may be declared as incapable by means of a voluntary interdiction action whereby a judge may declare that an individual is unfit to exert his or her own rights or obligations. If an individual is declared unfit to handle their own affairs, the judge will designate a guardian to take care of the individual's affairs.

Minors

What rules, restrictions and procedures govern the holding and management of a minor’s assets until the minor reaches the age of capacity?

Colombian family law grants the parents of a child usufruct over the property of the child, save for some exceptions, such as the assets acquired by the child because of his or her work, or received by the child as a result of an inheritance, legacy or gifts. In addition, Colombian family law grants the parents a right to administer the property of their children, except for the assets acquired by the child because of his or her work.

Once a child becomes of legal age (ie, 18 years old) and the parental powers over a child terminate, the parents are required to give full account of and hand over the property to the child. Parents are liable for any damage or reduction in the property of the child administered by them resulting from their negligence or wilful misconduct. They must therefore act in a careful and faithful manner. The administration of the child’s property by the parents can be subject to review by the authorities. Apart from establishing specific regulations regarding the administration of the property, authorities may, as an ultimate measure, appoint a legal guardian for the administration of the child’s property.

Family links

Marriage and civil partnerships

What matrimonial property regimes are recognised in your jurisdiction?

The Colombian Civil Code provides for the three matrimonial property regimes outlined below.

Community property

The general rule for marital property is the community of property regime. This is a regime that automatically comes into effect for all marriages and will remain so until the community of property is liquidated (either as a result of judicial decision or the will of the spouses). In this regime, most community property is owned in common by the spouses. It is not similar to co-ownership because the spouses (joint owners) do not possess a share in the property, but are full owners of the community property. However, upon liquidation of the community of property, the entire community property is split in equal shares. Under this regime, the right of a spouse to unilaterally dispose of assets is unlimited. A spouse is entitled to dispose of his or her personal property and the assets of the community of property as he or she sees fit. However, other dispositions may require, as a rule, the approval of the other spouse. This would be the case with real estate property. Some assets that are expressly excluded from the community of property by the Civil Code are:

  • real estate owned by each spouse before marriage;
  • real estate acquired by each spouse during marriage ‘replacing’ a real estate property owned by the spouse before marriage; and
  • real estate received during marriage as an inheritance.

At the time of the dissolution of the community property, each spouse is subject to debts acquired by the community of property and entitled to half the value of the community property. This, again, does not apply to certain properties or rights already owned by each spouse before the marriage.

The abovementioned community property regime will apply in the event that a de facto marital union takes place.

Colombian law and jurisprudence determines that a de facto marital union is configured once a couple agrees to have a singular and permanent relationship. This declaration may be legally recognised:

  • by the couple's mutual consent before a notary public, and is registered in a public deed; or
  • when the existence of the couple's union is declared by the Colombian judicial authorities.

Separation of property

At any time during the marriage, the spouses may agree on a separation property regime under which both spouses enjoy the same freedom in respect of their own property. Hence, there is no sharing of property acquired during the marriage and each spouse owns whatever he or she earns. This regime may also be the result of a judicial decision.

This regime is generally optional to the spouses. However, there is controversy as to whether the separation property regime may be agreed upon by spouses before marriage through a pre-nuptial agreement.

Regime set out by a pre-nuptial agreement

The third matrimonial property regime is the particular regime set forth by spouses in a pre-nuptial agreement. Civil Code regulations are quite broad and allow for spouses to agree upon any property management system they want to, provided that such agreement does not infringe upon public policy provisions or socially accepted customs.

However, as previously mentioned, there is not a single opinion on whether spouses may establish before marriage a separation property regime using a pre-nuptial agreement. Nonetheless, the majority believes that the law does not allow to waive the community of property regime prior to marriage.

Are same-sex marriages and/or civil partnerships recognised in your jurisdiction?

A progressive recognition of legal rights for same-sex couples has taken place in Colombia through case law. Today, same-sex couples can constitute de facto marital unions and even formalise their contractual bond before a judge or a notary public, and have the same pension, social security, property, inheritance and adoption rights as heterosexual couples. The latest legal development took place with Ruling SU-214/2016, whereby the Constitutional Court accepted same-sex marriages.

Children

Is there a legal distinction between legitimate and illegitimate children in terms of estate and succession planning?

There is no legal distinction between legitimate and illegitimate children in terms of estate planning or succession planning. Under Law 29/1982, all distinctions between illegitimate and legitimate children were abolished. Thus, all natural children are deemed to be the legitimate descendants of their natural parents; the earlier distinction between children born in or out of wedlock is no longer applicable.

Is there a legal distinction between natural and adopted children in terms of estate and succession planning?

There is no legal distinction between natural and adopted children in terms of estate and succession planning. In accordance with Law 29/1982, natural and adopted children have the same rights and obligations.