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V1599-22 1 July 2022 · SG de Impuestos Patrimoniales, Tasas y Precios Públicos Criterion in force
OTRO · disolución de comunidad de bienes

Dissolution of communities with excess adjudication subject to AJD rather than TPO or IIVTNU

A taxpayer queried the tax treatment of the dissolution of a co-ownership between two siblings involving financial compensation for excess adjudication. The DGT ruled that, subject to certain requirements, the transaction is subject to Stamp Duty (AJD) and not to Transfer Tax (TPO) or the Urban Land Value Increment Tax (IIVTNU).

The question raised

Taxation of the dissolution of the joint ownership existing between the two siblings regarding the Transfer Tax and Documented Legal Acts Tax and the Tax on the Increase in Value of Urban Land.

The DGT's ruling

In the dissolution of communities of indivisible assets, if the excess is compensated in cash (or through the assumption of debt or the transfer of common assets), the operation is not an onerous transfer but is taxed under the stamp duty on documented legal acts. For the IVTNU, the adjudication of full ownership does not constitute a transfer of property, therefore no tax accrual occurs, although the holding period for a future sale will be counted from the original acquisition by inheritance.

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