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V0102-22 21 January 2022 · SG de Impuestos Patrimoniales, Tasas y Precios Públicos Criterion in force
ISD · pacto sucesorio de presente

Inter vivos acquisition tax reductions do not apply to present succession agreements

Consultants inquired whether tax reductions for inter vivos acquisitions could be applied to a present succession agreement. The DGT ruled that these agreements constitute mortis causa acquisitions and therefore do not meet the requirements for inter vivos reductions.

The question raised

Whether the requirement of maintenance with the right to the exemption in Wealth Tax provided for in Article 20.6 of Law 29/1987 can be affected in the event that, following the transfer via succession agreement, a partial divestment of part of the activity occurs within the entity in which the applicants hold their shares, while maintaining its business activity, such that its partners maintain the right to the exemption in Wealth Tax but not with respect to 100 percent of the value of the entity's shares.

The DGT's ruling

Succession agreements are succession titles and constitute mortis causa acquisitions. For these agreements, it is not reasonable to apply the conditions of inter vivos acquisitions, as this would imply applying analogy, which is prohibited. It is not possible to apply the reduction provided in Article 20.2.c) of the LISD because the requirement that the deceased must have passed away at the time of the transfer is missing.

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