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V0223-14 30 January 2014 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · escisión financiera

Financial spin-offs do not affect Inheritance Tax reductions if they do not reduce the acquisition value

A family holding company has enquired whether a restructuring involving contributions and financial spin-offs affects the inheritance tax reductions applied by its partners. The DGT has ruled that the operation does not affect the right to the reduction, provided it does not result in a decrease in the value of the original acquisition.

The question raised

1) Article 20.6 of the Inheritance Tax Law establishes that mortis causa acquirers may not carry out acts of disposal and corporate operations that may lead to a substantial reduction in the value of the acquisition. Can it be considered that the referred corporate operations lead to a reduction in the acquisition value of the social shares of the consulting entity, taking into account that its partners will come to hold the shares of companies Newco C and Newco D in the same proportion?

The DGT's ruling

The obligation to maintain the acquisition for ten years following death refers to maintaining the value upon which the reduction was applied, whether in the inherited shares or those received following corporate operations. The exchange of securities that provides shares in the new companies in the same proportion as in the parent company does not affect the reduction, provided it does not result in a reduction of the value of the mortis causa acquisition. The application of the special Corporate Tax regime and the non-subjectivity to VAT depend on compliance with specific requirements regarding economic unity and valid economic reasons.

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