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V0576-16 11 February 2016 · SG de Impuestos Patrimoniales, Tasas y Precios Públicos Criterion in force
ISD · donación

Annual endowments from a Swiss foundation are subject to Inheritance and Gift Tax

A married couple receives an annual endowment from a Swiss foundation following the death of its founder. The Directorate General for Taxes (DGT) has ruled that these payments constitute gratuitous transfers and must be taxed under Inheritance and Gift Tax.

The question raised

Whether taxation must be carried out, as a donation, under the Inheritance and Gift Tax or, as a capital gain, under Personal Income Tax.

The DGT's ruling

The amounts paid by a foundation have the nature of transfers made free of charge by a legal entity. As this constitutes an acquisition of goods and rights by donation or a gratuitous inter vivos legal transaction, taxation is applicable under the Inheritance and Gift Tax. Therefore, they are not subject to Personal Income Tax.

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