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V2054-18 11 July 2018 · SG de Impuestos Patrimoniales, Tasas y Precios Públicos Criterion in force
ITPAJD · exceso de adjudicación

Excess allocation in the dissolution of joint ownership is subject to AJD rather than ITP

A taxpayer seeks to dissolve a joint ownership agreement for a property with 21 other co-owners, acquiring the entire property and compensating the others in cash. The Directorate General for Taxes (DGT) rules that, as the property would lose value if divided, the excess allocation is not subject to Transfer Tax (ITP), but rather to the Stamp Duty (AJD) modality.

The question raised

Whether the excess of adjudication resulting from the dissolution of the undivided interest in an indivisible family home constitutes an operation subject to the Transfer Tax or would remain not subject to said modality under the protection of article 7-2-B of the Recast Text of the aforementioned tax.

The DGT's ruling

When the dissolution of a community of property does not result in an excess of adjudication, there is no transfer of assets and it is taxed under AJD. If an excess of adjudication exists, it is taxed under ITP, unless it arises to comply with article 1,062 of the Civil Code (adjudication to one of the co-owners by paying the excess in cash due to the indivisibility of the asset). In that exceptional case, the excess is not an onerous transfer and is taxed under the variable rate of AJD.

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