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V1900-20 11 June 2020 · SG de Impuestos Patrimoniales, Tasas y Precios Públicos Criterion in force
ITPAJD · consolidación del dominio

Consolidation of ownership upon death of usufructuary is not subject to ITP if the bare owner already held full ownership

A query was raised regarding whether the consolidation of ownership following the death of a life usufructuary is subject to Transfer Tax (ITP). The Directorate General for Taxes (DGT) ruled that no tax is due if the bare owner already held full ownership prior to the dismemberment of ownership.

The question raised

Taxation of the consolidation of ownership over the real estate upon the extinction of the life usufruct due to the death of the applicant's mother.

The DGT's ruling

The extinction of the usufruct due to death does not constitute a new acquisition, but rather the recovery of the full ownership previously held. The rule of liquidation by consolidation only applies if the current holder was not the owner of the full ownership at the time the right was dismembered. If the owner already held the full ownership prior to the constitution of the usufruct, the consolidation is not subject to tax.

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