Back to index
V2397-16 1 June 2016 · SG de Tributos Locales Criterion in force
OTRO · iivtnu

Succession agreements of 'definition' qualify as mortis causa transfers for IIVTNU tax relief

A query was raised regarding whether a succession agreement of 'definition' in the Balearic Islands, whereby property is transferred to a child in exchange for waiving their forced heirship rights, allows for the application of the 95% IIVTNU tax relief. The DGT ruled that this agreement constitutes a mortis causa legal transaction and, therefore, is eligible for the tax reliefs provided for such transfers.

The question raised

Whether the tax benefits established in the tax regulations would be applicable, and specifically, the rebate of up to 95% of the gross tax liability which, in accordance with the provisions of Article 108.4 of the TRLRHL, may be regulated by city councils in their tax ordinances for transfers made for consideration by reason of death in favor of descendants and adoptees, spouses, and ascendants and adopters.

The DGT's ruling

The succession agreement known as 'definición' must be classified as a legal transaction mortis causa, as it is regulated under the succession title of the Civil Law of the Balearic Islands. As it constitutes a transfer for consideration by reason of death, the tax benefits of the IIVTNU are applicable to this type of transaction. Specifically, a rebate of up to 95% of the gross tax liability shall apply if the city council has established it in its tax ordinance pursuant to Article 108.4 of the TRLRHL.

Book your free first meeting