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V0178-20 24 January 2020 · SG de Impuestos Patrimoniales, Tasas y Precios Públicos Criterion in force
ITPAJD · exceso de adjudicación

Awarding an asset to two co-owners instead of one is subject to transfer tax

A consultant and his wife (under community property regime), along with a brother, wish to dissolve a co-ownership by awarding the flat to the couple and paying the brother his share. The DGT ruled that, because the asset is awarded to two people rather than a single person, the indivisibility exception does not apply, and tax must be paid on the excess award.

The question raised

Three questions have been raised:

The DGT's ruling

The allocation of an asset to two co-owners does not imply the extinction of the community, but rather a partial dissolution or the separation of a co-owner. Since the asset is not allocated to a single co-owner, the exception under Article 1,062 of the Civil Code does not apply. Therefore, the excess allocation received by the spouses is considered an onerous transfer of assets subject to Transfer Tax (ITP).

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