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V0801-22 12 April 2022 · SG de Impuestos Patrimoniales, Tasas y Precios Públicos Criterion in force
ISD · explotación agraria prioritaria

90% Inheritance Tax reduction for rural land transfers is not applicable

A query was raised regarding whether the transfer of rural estates from a father to his children upon death allows for the agricultural business reduction. The Directorate General for Taxes (DGT) ruled that this is not applicable because the deceased was not the owner of the agricultural business, but rather an agricultural company.

The question raised

Applicability of the reduction provided for in Article 9 of Law 19/1995, of July 4, on the Modernization of Agricultural Holdings.

The DGT's ruling

The 90% reduction provided for in Article 9 of Law 19/1995 is not applicable because an agricultural holding is not being transferred in its entirety, but rather rural estates, as the deceased did not carry out the activity. Neither the exemption under Article 10 nor the 75% reduction under Article 11 applies, since the heirs are not the holders of the priority agricultural holding, but rather the agricultural company.

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