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V0048-21 18 January 2021 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · extinción de comunidad de bienes

Financial compensation in the dissolution of a community of property may result in capital gains or losses

A query was raised regarding whether the dissolution of a hereditary community involving financial compensation between sisters triggers Personal Income Tax (IRPF). The Directorate General for Taxes (DGT) ruled that adjudication according to ownership shares is not taxable; however, if assets are allocated at a value exceeding the ownership share, a capital gain or loss is generated.

The question raised

Taxation of the extinction of co-ownership in Personal Income Tax.

The DGT's ruling

The dissolution of a community of property does not constitute a capital alteration if the allocation corresponds to the ownership share. However, if assets are allocated at a value exceeding a co-owner's share, a capital alteration occurs for the others. This alteration generates a capital gain or loss, regardless of whether cash compensation is provided.

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