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V0260-20 4 February 2020 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · ganancia patrimonial

No capital gain or loss on the donation of shares if requirements under Art. 20.6 of the IHT and Gift Tax Act are met

A taxpayer inquired about the Personal Income Tax (IRPF) implications regarding the donation of company shares to their daughters. The Directorate General for Taxes (DGT) ruled that no capital gain or loss will arise provided the requirements set out in Article 20.6 of the Inheritance and Gift Tax Act are satisfied.

The question raised

Taxation of the donation in Personal Income Tax.

The DGT's ruling

The donation of shares generates a capital gain or loss due to the alteration in the composition of the assets. However, such gain or loss shall not be recognized if it involves lucrative transfers of companies or shares that meet the requirements of Article 20.6 of Law 29/1987. To this end, it is necessary that the donees retain what was acquired and be entitled to the exemption from Wealth Tax for ten years. Compliance with these requirements is sufficient, and regional regulations are irrelevant.

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