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V2326-20 7 July 2020 · SG de Impuestos Patrimoniales, Tasas y Precios Públicos Criterion in force
ITPAJD · sociedad de gananciales

Dissolution of community property with avoidable excess adjudication is subject to transfer tax

A couple sought clarification regarding ITP and AJD taxation upon the dissolution of their community property, which included a home, cash, and a livestock farm. The DGT clarified that adjudication without excess does not constitute a transfer; however, if there is an avoidable excess of adjudication involving economic compensation, it is considered an onerous transfer of assets.

The question raised

Taxation of the aforementioned operation under Transfer Tax and Stamp Duty.

The DGT's ruling

The allocation of assets in the dissolution of community property does not constitute a transfer if each spouse receives 50% of their assets. If there is an excess in allocation that can be avoided through cash compensation, this constitutes an onerous asset transfer subject to Transfer Tax and Stamp Duty. If the excess is unavoidable due to indivisibility (pursuant to art. 1,062 of the Civil Code), it shall be taxed under the variable rate for documented legal acts. In the specific case, as more equivalent lots can be formed, the excess is considered avoidable and must be taxed as an onerous transfer.

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