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A taxpayer inquired whether transferring a property to their children through an improvement pact (under Galician civil law) is exempt from Personal Income Tax (IRPF). The Directorate General for Taxes (DGT) ruled that these types of succession pacts are considered gratuitous transfers by reason of death.
This ruling clarifies that transfers made through improvement pacts are treated as death-related transfers rather than standard sales, affecting how capital gains are assessed for tax purposes.
The tax team reviews your specific situation.
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