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V0971-25 5 June 2025 · SG de Impuestos Patrimoniales, Tasas y Precios Públicos Criterion in force
ISD · reducción en la base imponible

Reduction of 95% cannot be applied to Inheritance Tax if donor is a legal entity

The consultant asks whether a reduction for donation of company shares can be applied when the donor is a legal entity. The DGT responds that it is not possible because the donor must be a liable party to the Wealth Tax and meet personal requirements.

The question raised

Whether the reduction established in Article 20.6 of the Inheritance and Gift Tax Law may be applied.

The DGT's ruling

The reduction provided in Article 20.6 of the LISD is not applicable because the donor must be entitled to the exemption in Wealth Tax, and legal entities are not taxpayers of said tax. Furthermore, the donor must be a spouse, descendant, or adoptee, conditions which are not met by a legal entity. Finally, the requirements regarding the age or incapacity of the donor, or the performance of management functions by the donor, are not met.

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