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V0218-22 9 February 2022 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IP · exención

Wealth Tax exemption may apply if a family member holds management roles

A married couple enquired whether their shares in a company were exempt from Wealth Tax, given that they did not hold management positions but their children did. The DGT ruled that the exemption applies if at least one person within the family group meets the requirements regarding management and remuneration.

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 the remuneration exceeding 50% of the yields must be fulfilled by at least one of the persons in the kinship group. In this case, as the children fulfill the management and remuneration requirements, the parents are also entitled to the exemption. Regarding Personal Income Tax (IRPF), in transfers of holdings subject to the reduction in Inheritance and Gift Tax, the non-existence of capital gains or losses shall be presumed provided that the requirements of Law 29/1987 are met.

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