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V0880-18 4 April 2018 · SG de Impuestos Patrimoniales, Tasas y Precios Públicos Criterion in force
ISD · reducción por empresa

Business reduction in Inheritance Tax maintained if acquisition value is preserved following a demerger

A query was raised regarding whether a corporate demerger that does not qualify for the special regime of Corporate Tax would result in the loss of the business reduction in Inheritance Tax. The DGT ruled that the right is maintained provided the acquisition value is preserved throughout the required holding period.

The question raised

Whether, in the event of a corporate spin-off, the right to the reduction applied could be maintained in the event that the planned corporate operation does not qualify for the tax regime provided for in Chapter VII of Title VII of the Corporate Income Tax Law.

The DGT's ruling

The Law requires maintaining the acquisition value for ten years to retain the 95 percent reduction. If, following a spin-off, ownership of other shares or holdings is held and at least the acquisition value is maintained, Article 20 of Law 29/1987 is satisfied. The reference to special regimes in previous rulings is a descriptive interpretation and not an additional requirement to the Law.

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