Skip to content
Back to index
V2192-20 29 June 2020 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · ganancia patrimonial

Donating a professional business may not trigger capital gains or losses for Personal Income Tax purposes

A lawyer requested guidance on how to declare the donation of a property used for their professional activity. The Directorate General of Taxes (DGT) clarified that if the requirements of the Inheritance and Gift Tax Law for the transfer of professional businesses are met, no capital gain or loss will be assessed for Personal Income Tax (IRPF) purposes.

The question raised

How said operation must be declared in the Personal Income Tax.

The DGT's ruling

The donation of real estate generates a capital gain or loss based on the difference between the acquisition and transfer values. However, no capital gain or loss shall be estimated if it constitutes a lucrative transfer of a business or professional activity that meets the requirements of Article 20.6 of Law 29/1987. To this end, the donor must be 65 years of age or have a disability, cease to perform management functions, and the donee must retain the acquired assets and be entitled to the exemption from Wealth Tax for ten years.

Book your free first meeting