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V0198-20 28 January 2020 · SG de Impuestos Patrimoniales, Tasas y Precios Públicos Criterion in force
ITPAJD · proindiviso

Dissolution of joint property subject to AJT if excess adjudication is compensated in cash

Three siblings seek to dissolve a co-ownership of three properties acquired through different means (inheritance and donation). The DGT is analysing whether allocating one property to each sibling constitutes an onerous transfer or if it should be taxed under Documented Legal Acts (AJD).

The question raised

Taxation of the extinction of the undivided interest.

The DGT's ruling

If the dissolution of each community is carried out by allocating an asset to each co-owner and the latter compensates for the excess allocation in cash, it shall be taxed under the variable rate for documented legal acts, as it constitutes an unavoidable excess due to indivisibility. However, if the compensation is not in cash, but through the delivery of shares in another community of property, the operation is considered a barter and shall be taxed under onerous transfers of assets.

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