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V2376-20 10 July 2020 · SG de Impuestos Patrimoniales, Tasas y Precios Públicos Criterion in force
ITPAJD · disolución de comunidad de bienes

Allocation of assets from different co-ownerships to offset excesses is taxed as an onerous exchange

Two siblings wish to terminate two distinct forms of co-ownership (one via donation and another via inheritance) by allocating assets from both to balance their values. The Directorate General for Taxes (DGT) rules that, because assets from different co-ownerships are being mixed, the operation constitutes an exchange rather than a dissolution of co-ownership.

The question raised

Taxation of the referred operations, specifically whether the extinction of both joint ownerships through the allocation of donated and inherited assets is eligible for the tax exemption for condominiums.

The DGT's ruling

The dissolution of two distinct communities of property constitutes two independent legal transactions. If assets from one community are allocated to compensate for excesses in the other, the requirement for compensation in cash under Article 1,062 of the Civil Code is not met. In such cases, the operation is classified as a barter of shares in real estate assets and is taxed under the modality of onerous transfers of property. Likewise, if assets are maintained in joint ownership, there is no extinction of the community and the taxation for documented legal acts does not apply.

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