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V0776-23 31 March 2023 · SG de Impuestos Patrimoniales, Tasas y Precios Públicos Criterion in force
ITPAJD · transmisión onerosa

Rectification of a 1990 deed constitutes a taxable transfer of property

A taxpayer sought to execute a deed of rectification to include a share of a commercial premises not mentioned in a 1990 sale, claiming it was exempt from Transfer Tax (ITP). The Directorate General for Tax Affairs (DGT) ruled that, as there were no nullity defects in the original act, this does not constitute a rectification but rather a new transfer.

The question raised

Question posed: Whether the referred rectification would be exempt from Transfer Tax and Stamp Duty since, although the sellers will not receive any price from the garage owners, the transfer cannot be considered subject to Gift Tax, but rather has an onerous character, given that the price must be understood as included in the price of the garage sale carried out at that time, and that, furthermore, the buyers will pay from that moment onwards the expenses and taxes affecting the transit premises.

The DGT's ruling

The alleged rectification is a genuine transfer of assets because it does not seek to remedy the ineffectiveness of a previous act due to nullity or non-existence. Its nature shall be onerous or gratuitous according to the agreed terms, applying Transfer Tax (ITP) or Gift Tax respectively. The transfer is understood to be carried out at the current moment and cannot be backdated to 1990 for settlement purposes. The tax base shall be the cadastral reference value or the market value, whichever is higher.

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