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V1432-19 14 June 2019 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · ganancia patrimonial

Selling or gifting shares to a child may not trigger capital gains if Art. 20.6 of the IHT Act requirements are met

A 65-year-old taxpayer wishes to sell half of their company shares to their child and donate the other half. The DGT explains that the sale generates a capital gain or loss based on market value or net equity, whereas the gift may not trigger a gain if the exemption requirements under the Inheritance and Gift Tax Act are satisfied.

The question raised

Tax treatment of said operation in the Personal Income Tax of the taxpayer.

The DGT's ruling

The onerous transfer of shares not admitted to trading generates a gain or loss based on the difference between the acquisition value and the transfer value, where the transfer value shall be the market value or, failing that, the higher of the net equity or the capitalization value. In a lucrative transfer (donation), no capital gain or loss shall be recognized if the requirements of Article 20.6 of Law 29/1987 are met. If said requirements are met, it shall be considered that no gain or loss exists for the donor, regardless of whether the donee applies the reduction or of the applicable regional regulations.

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