Back to index
V0064-19 11 January 2019 · SG de Impuestos Patrimoniales, Tasas y Precios Públicos Criterion in force
IP · exención

Perception of a retirement pension prevents Wealth Tax exemption if personal and direct management of activity is required

The inquirer asks whether retiring would result in the loss of Wealth Tax exemption and Inheritance Tax reductions. The DGT rules that retirement prevents the personal and direct management of the business activity, which is a necessary requirement for the exemption.

The question raised

An extension of Binding Ruling V0965-18 is requested regarding the compatibility of retirement, without the personal and direct development of the activity, with the Wealth Tax exemption and the possibility of applying the reduction provided for in the Inheritance and Gift Tax Law in the event of death.

The DGT's ruling

For the exemption from Wealth Tax, the activity must be carried out on a regular, personal, and direct basis by the taxpayer. The receipt of a retirement pension prevents the personal and direct management of the business. Therefore, as this requirement is not met, neither the wealth tax exemption nor the reduction in inheritance tax is applicable.

Book your free first meeting