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V0934-24 25 April 2024 · SG de Impuestos Patrimoniales, Tasas y Precios Públicos Criterion in force
ISD · reducción de la base imponible

95% Inheritance and Gift Tax reduction denied due to failure to meet Wealth Tax exemption requirements

Consultants inquired whether a 95% reduction in Inheritance and Gift Tax could be applied to the donation of solar panels and company shares. The DGT ruled that this is not possible because the donor does not meet the Wealth Tax exemption requirements necessary to qualify for said reduction.

The question raised

Whether they are entitled to the 95 percent reduction established by Article 20.6 of the Inheritance and Gift Tax Law for the donation of the solar panel and the shares of entity C.

The DGT's ruling

To apply the 95% reduction to the taxable base of the donation, it is a necessary condition that the transferred assets be exempt from Wealth Tax. In this case, the solar panel does not qualify because the activity is not carried out personally and directly as it requires an intermediary. Regarding the shares, the requirement of owning at least 5% of the capital is not met, nor is the requirement of performing management functions with remuneration.

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