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V0213-16 21 January 2016 · SG de Impuestos Patrimoniales, Tasas y Precios Públicos Criterion in force
ISD · reducción por donación de participaciones

Reduction for donation of shares maintained if contributed to a new holding company

A query was raised regarding whether contributing donated shares, alongside other personally owned shares, to a new holding company would affect the reduction provided under Article 20.6 of the Inheritance and Gift Tax Act. The Directorate General of Taxes (DGT) ruled that the reduction would not be lost, provided the original acquisition value is maintained and all other legal requirements are met.

The question raised

Whether the contribution of the donated shares, as well as those of previous ownership held by the donees, to the new holding company before the expiration of the legal period would affect the maintenance of the reduction provided for in Article 20.6 of the Inheritance and Gift Tax Law.

The DGT's ruling

If the management bodies carry out corporate operations (such as the contribution of assets) and ownership passes from the original shares to those received in exchange for them, the reduction is not lost if the acquisition value is maintained. This criterion is applicable to inter vivos acquisitions, even if the contribution to the new company includes other shares of previous ownership held by the donees.

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