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V0198-22 7 February 2022 · SG de Impuestos Patrimoniales, Tasas y Precios Públicos Criterion in force
ITPAJD · nuda propiedad

Acquisition of bare ownership in exchange for a life annuity is subject to ITPAJD upon property transfer

An entity has requested a ruling regarding the tax base for acquiring the bare ownership of properties through life annuity payments. The DGT has determined that the transfer of bare ownership is subject to ITPAJD (Inheritance and Gift Tax), whereas the establishment of the annuity is exempt from this tax as it is subject to VAT.

The question raised

Tax base of the acquisition of the bare ownership of the real estate.

The DGT's ruling

The transfer of bare ownership by natural persons is an operation subject to ITPAJD, with the acquirer being the taxable person. The tax base of the bare ownership is calculated as the difference between the value of the usufruct and the total value of the assets. For its part, the establishment of a life annuity is not taxed under ITPAJD because it is a provision of services subject to VAT, even if the latter is exempt. If the tax base of the bare ownership exceeds that of the pension by more than 20% and by 12,020.24 euros, the difference could be taxed as a donation, although in this case it does not apply as the transferee is a legal entity.

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