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V0229-19 4 February 2019 · SG de Impuestos Patrimoniales, Tasas y Precios Públicos Criterion in force
ISD · repudiación de herencia

Renouncing an inheritance should not trigger Wealth Tax or Income Tax

A taxpayer inquired whether renouncing an inheritance triggers Inheritance Tax (ISD), Wealth Tax, or Income Tax (IRPF). The DGT ruled that the renouncing party is not liable for Wealth Tax or Income Tax because the assets never entered their estate.

The question raised

Whether the consultant, in the event that they have not accepted the inheritance, must pay tax in Inheritance and Gift Tax, Wealth Tax, or Personal Income Tax, and, if so, under what conditions.

The DGT's ruling

In Wealth Tax, the repudiating party must not include the repudiated assets because these pass directly to the beneficiary with effect from the death of the decedent. In Personal Income Tax, the repudiating party must not declare capital gains or losses for the repudiated portion, as no change in assets occurs since they are not integrated into their estate. The rule that considers repudiation as a gift in Inheritance and Gift Tax only taxes the beneficiary and does not imply that the repudiating party had previously acquired the assets.

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