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A taxpayer enquired whether transferring a property to their daughter through an improvement pact under Galician civil law is subject to Personal Income Tax (IRPF). The Directorate General for Taxes (DGT) ruled that this transaction is considered a gratuitous transfer by reason of death and, therefore, does not generate any capital gain or loss.
This ruling clarifies that transfers made through specific succession pacts under Galician law are treated as death-related transfers rather than standard sales, exempting them from capital gains tax in the IRPF.
The tax team reviews your specific situation.
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