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V0176-19 28 January 2019 · SG de Impuestos Patrimoniales, Tasas y Precios Públicos Criterion in force
ISD · nuda propiedad

Family business reduction applies to the acquisition of full ownership, bare ownership, or usufruct of shares, subject to requirements

Two siblings inquired whether they could apply the reduction under Article 20.2 of the LISD when inheriting shares in a limited company, whether as full ownership, bare ownership, or usufruct. The DGT ruled that this is possible provided the statutory requirements are met, including the exemption from Wealth Tax.

The question raised

Application of the reduction provided for in Article 20.2 of the Inheritance and Gift Tax Law and in the regional regulations of the Autonomous Community of Galicia in the mortis causa acquisitions of full ownership, bare ownership, and usufruct of the shares.

The DGT's ruling

The acquisition of shares by way of inheritance, whether in full ownership, bare ownership, or usufruct, must be taxed according to the valuation rules of Article 26 of the Inheritance and Gift Tax Law. In all these cases, the reduction provided for in Article 20.2 of the Inheritance and Gift Tax Law is applicable provided that its requirements are met, notably the condition that the shares enjoy the exemption provided for in the Wealth Tax.

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