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V0313-19 14 February 2019 · SG de Impuestos Patrimoniales, Tasas y Precios Públicos Criterion in force
IP · exención por participaciones

Inability to apply patrimony exemption or succession reduction due to lack of requirements

A Spanish resident asks whether she can claim the exemption from the Wealth Tax on shares in a Mexican company and whether she can benefit from the family enterprise reduction in the Inheritance Tax. The DGT states that the requirements for minimum shareholding and family relationship group are not met, and that the deceased's non-subject status to the Wealth Tax prevents the application of the family enterprise reduction.

The question raised

1) Possibility of applying the exemption provided for in Wealth Tax to the holdings if, in 2019, the inquirer receives the donation of the holdings.

The DGT's ruling

For the exemption in Wealth Tax, the members of the kinship group must have been previously taxpayers, whether by personal or real obligation. As the relatives reside in Mexico and do not hold assets in Spain, they are not taxpayers and the inquirer does not form a kinship group with them. Therefore, the 95% reduction in Inheritance and Gift Tax is not applicable, as the exemption in Wealth Tax is a necessary condition for its application.

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