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V1562-22 30 June 2022 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · ganancia patrimonial

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

Owners of a livestock farm over the age of 65 have consulted whether donating their business to their daughter allows them to avoid declaring capital gains for Personal Income Tax (IRPF) purposes. The Directorate General for Taxes (DGT) has ruled that the exemption applies provided the requirements of Article 20.6 of the Inheritance and Gift Tax Law are satisfied.

The question raised

Whether the provisions of Article 33.3.c) of the Personal Income Tax Law are applicable to the donation.

The DGT's ruling

The non-existence of capital gains or losses is estimated in the gratuitous transfers of companies or holdings that meet the requirements of Article 20.6 of Law 29/1987. To this end, the assets must have been used for business purposes uninterruptedly for at least five years prior to the transfer. This criterion applies regardless of whether the donee applies the reduction in their own tax return.

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