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V0432-18 16 February 2018 · SG de Impuestos Patrimoniales, Tasas y Precios Públicos Criterion in force
ITPAJD · comunidad de bienes

Dissolution of joint ownership communities with different owners subject to taxation based on the nature of the allocation

A query was raised regarding whether the extinction of several co-ownership arrangements with different co-owners in each property constitutes one or multiple communities, and how the subsequent allocation is taxed. The DGT has determined that these are independent communities and that taxation will depend on whether there is an excess in allocation, whether compensation is made in cash, or if the dissolution is partial.

The question raised

Whether, for the purposes of the Transfer Tax and Documented Legal Acts Tax, there should be considered to exist one community of property or two communities, given that they are registered with two different tax identification numbers in the Tax Agency, or four independent communities, taking into account that the ownership percentages in the four estates vary in each of them, such that the co-owners are different in each estate.

The DGT's ruling

If the holders do not coincide in all assets, there exist independent communities of property that must be dissolved separately. The adjudication of assets without an excess of participation is not taxed as onerous transfers, but an excess is: as a donation if it is gratuitous, or via the variable rate of Stamp Duty (AJD) if it is onerous and the compensation is in cash. If the compensation consists of assets from another community, it is taxed as a barter. If the dissolution is partial and an asset remains in undivided ownership, the operation is taxed as a barter if it is onerous.

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