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V1340-24 7 June 2024 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
ITPAJD · disolución de comunidad de bienes

Dissolution of co-ownership via equivalent lots taxed as documented legal acts rather than onerous transfers

A taxpayer queried the taxation of a co-ownership dissolution involving several properties between two siblings without financial compensation. The DGT ruled that, as equivalent and proportional lots are formed, it constitutes documented legal acts rather than onerous transfers, and no capital gains arise for Income Tax purposes.

The question raised

Taxation for the purposes of Personal Income Tax and Property Transfer Tax and Documented Legal Acts regarding the dissolution of the undivided interest.

The DGT's ruling

The dissolution of community property through the formation of lots equivalent and proportional to the participation shares does not constitute an onerous transfer of assets, but is instead taxed under the modality of documented legal acts. For Personal Income Tax purposes, the adjudication of assets in accordance with the ownership share does not imply a change in the composition of the assets, and therefore does not generate capital gains or losses. The updating of the values of the received assets is not permitted; they maintain their original values and acquisition dates.

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