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V0217-22 9 February 2022 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IP · exención

Exemption from Wealth Tax on company shares may apply if a family member holds management roles

A married couple has enquired whether their shares in a company are exempt from Wealth Tax, given that their children hold management positions. The DGT has ruled that the exemption is possible provided the kinship group meets the requirements regarding activity, shareholding, and management.

The question raised

1.) Exemption of holdings in Wealth Tax.

The DGT's ruling

For the exemption from Wealth Tax, if the holding is held jointly with family members, the management functions and remuneration exceeding 50% of the yields must be fulfilled by at least one person within the kinship group. In the case analyzed, as the children fulfill the management and remuneration requirements, the parents are entitled to the exemption. Likewise, in transfers of holdings subject to the Wealth Tax exemption, the absence of capital gains or losses for Personal Income Tax purposes is estimated if the requirements of the Inheritance and Gift Tax Law are met.

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