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V2018-17 26 July 2017 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · exención por transmisión lucrativa

Income Tax exemption for share donations may apply if Inheritance, Gift, and Wealth Tax requirements are met

A family group inquired whether donating shares in a holding company allows for an Income Tax exemption. The DGT ruled that this is possible provided the requirements for reductions under Inheritance and Gift Tax and the exemption under Wealth Tax are satisfied.

The question raised

Application of the exemption provided for in Article 33.3.c) of the Personal Income Tax Law and the reduction provided for in Article 20.6 of Law 29/1987, of December 18, on Inheritance and Gift Tax.

The DGT's ruling

The exemption under Article 33.3.c) of the Personal Income Tax Law applies to lucrative transfers of shares that comply with Article 20.6 of the Inheritance and Gift Tax Law. To this end, the exemption under Wealth Tax must apply pursuant to Article 4.Eight. Two of Law 19/1991. The donees must maintain the acquired assets and the right to the Wealth Tax exemption for ten years.

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