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V1392-23 23 May 2023 · SG de Impuestos Patrimoniales, Tasas y Precios Públicos Criterion in force
OTRO · exceso de adjudicación

Asset allocation in the dissolution of community property is subject to onerous transfer tax if there are excesses in allocation

A taxpayer inquired whether the allocation of a house and two garages during the liquidation of community property could be considered an indivisible lot to avoid tax on excess allocation. The DGT ruled that if the assets allow for the formation of equivalent lots, any excess allocation will be taxed as an onerous transfer and subject to Property Transfer Tax (IIVTNU).

The question raised

Whether it is appropriate to consider a lot as indivisible for the purpose of avoiding excesses in adjudication, in relation to the Tax on Transfers of Property and Documented Legal Acts and the Tax on the Increase in the Value of Urban Land.

The DGT's ruling

In the dissolution of a community property regime, the adjudication of assets is a mere specification of a pre-existing right and is exempt from ITPAJD. However, if assets are adjudicated that allow for the formation of equivalent lots and an excess of adjudication occurs, said excess shall be taxed under transfer tax. Likewise, the portion of the real estate property that causes the excess of adjudication shall be subject to IIVTNU. To avoid such taxation, the assets must be indivisible or suffer significant loss of value upon division, which must be assessed on a case-by-case basis.

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