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V0294-21 18 February 2021 · SG de Impuestos Patrimoniales, Tasas y Precios Públicos Criterion in force
ISD · derecho de crédito

Donation of a credit right is not subject to Inheritance and Gift Tax if it cannot be fulfilled in Spain

A married couple residing in Germany donated part of a credit right arising from a loan to their children. The DGT ruled that the donation is not taxable in Spain because the right is neither located nor capable of being fulfilled within Spanish territory.

The question raised

1. Whether the donation of part of the credit right of the spouses derived from loan 1 in favor of their children is subject to Inheritance and Gift Tax in Spain.

The DGT's ruling

The donation of a credit right to non-resident donees is not subject to Inheritance and Gift Tax by virtue of real obligation if the right is not located, cannot be exercised, nor fulfilled in Spanish territory. In this case, as the refund is agreed upon in Germany and judicial competence lies with German courts, no tax obligation exists in Spain.

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