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V0116-24 15 February 2024 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · usufructo temporal

Donating temporary usufruct of a property to a child may limit tax liability to a minimum yield if gratuitousness is proven

A property owner has enquired about the tax treatment of donating the temporary usufruct of her share of a property to her son so that he may receive the rental income. The DGT indicates that if the transaction is proven to be gratuitous, only the minimum net yield provided by law will be imputed.

The question raised

Tax treatment in the Personal Income Tax of the taxpayer regarding the donation of the usufruct.

The DGT's ruling

The establishment of a usufruct generates, unless proven otherwise, a return on real estate capital valued at market price. If the gratuitous nature of the donation is proven, the presumption of remuneration does not apply and the tax impact is limited to the imputation of the net return under Article 85 of the Personal Income Tax Law (LIRPF). If the gratuitous nature is not proven, the normal market value shall apply, provided that the return is not lower than the legal minimum established in Article 85.

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