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V0470-18 21 February 2018 · SG de Impuestos Patrimoniales, Tasas y Precios Públicos Criterion in force
ITPAJD · exceso de adjudicación

Dissolution of co-ownership with unavoidable excess allocation subject to variable AJD rate

A taxpayer inquired about the settlement of ITP and AJD when dissolving a co-ownership of a flat and a garage through the allocation of different assets and cash compensation. The DGT ruled that, as the excess is unavoidable to extinguish the co-ownership, it does not constitute an onerous transfer but is instead subject to the variable rate of AJD.

The question raised

What would be the correct settlement of the Transfer Tax and Stamp Duty, and whether the tax base would be the total value of the real estate properties or only the excess.

The DGT's ruling

If the dissolution of the community entails an inevitable excess of adjudication to avoid the division of assets or their impairment, this does not constitute an onerous transfer of assets. In this case, the transaction is taxed under the variable rate of Stamp Duty (AJD). The tax base shall be the declared value of the share corresponding to each co-owner in the community. Both co-owners hold the status of taxable persons.

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