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V2287-14 5 September 2014 · SG de Impuestos Patrimoniales, Tasas y Precios Públicos Criterion in force
ISD · deudor solidario

Release of a joint and several debtor subject to Gift Tax if no consideration is provided

A query was raised regarding the taxation of the release of a joint and several debtor and the inclusion of new debtors. The DGT determines that the release of a debt without consideration constitutes a taxable event for Gift Tax.

The question raised

Taxation regarding both the release of the consultant and the inclusion of the parents as new debtors.

The DGT's ruling

If the debtor is released from their obligation to pay without any consideration, the transaction constitutes a taxable event for Gift Tax. If the release occurs through the satisfaction to the other party of the corresponding portion of the outstanding debt, the transaction is not lucrative in nature and is exempt under Transfer Tax.

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