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V1343-24 7 June 2024 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · ganancia patrimonial

No capital gains tax on share donations if Art. 20.6 LISD requirements are met

The taxpayer asks whether the donation of shares in their management company can qualify for a reduction in Inheritance and Gift Tax (IGT) and avoid taxation under Personal Income Tax (IRPF). The DGT rules that if the requirements of the LISD for the IGT reduction are satisfied, no capital gain or loss shall be recognised for the donor's IRPF purposes.

The question raised

Whether the provisions of article 20.6 of the Inheritance and Gift Tax Law and article 33.3.c) of the Personal Income Tax Law may be applicable to the donation.

The DGT's ruling

To apply the 95% reduction in the ISD, the donor must be entitled to the exemption in Wealth Tax, meeting the requirements of economic activity, minimum participation, and management functions. In the IRPF, the non-existence of capital gains or losses in lucrative transfers that meet the requirements of article 20.6 of the LISD shall be presumed, provided that the affected assets have been part of the economic activity for at least five years prior to the transfer. This criterion of non-liability in IRPF is applicable regardless of whether the donee applies the reduction in the ISD.

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