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V0711-14 14 March 2014 · SG de Tributación de las Operaciones Financieras Criterion in force
IRPF · participaciones preferentes

Conversion of preferred shares into ordinary shares generates income from movable capital

The taxpayer inquires about the tax treatment of converting preferred shares into ordinary shares following a FROB resolution. The DGT rules that the transaction generates income from movable capital based on the difference between the repurchase price and the acquisition value.

The question raised

Tax treatment of this operation in the Personal Income Tax.

The DGT's ruling

The conversion generates a return on movable capital determined by the difference between the repurchase price set by the FROB and the subscription or acquisition value of the securities. This return constitutes savings income and is included in the savings tax base. If the return is negative, it shall be offset against positive returns on movable capital from the same period or the following four years. The shares received shall have as their acquisition value the subscription price set in the resolution.

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