Two brothers, each holding 50% in a joint property arrangement, funded the Reserve for Investments in the Canary Islands (RIC) in 2022 and made investments via the joint property company in 2023. They asked whether this investment was valid. The DGT confirmed that each co-owner individually funds and realizes the RIC in proportion to their share, either through the joint property company or individually, but warned that dissolving the joint property company breaches the five-year maintenance requirement for assets acquired, necessitating IRPF regularization with interest for delay.
Question raised 1. Whether the execution of investments eligible for the materialization of the Canary Islands Investment Reserve through a community of property is correct.
Communities of property are not taxpayers for Personal Income Tax (IRPF); their yields are attributed to the co-owners (Art. 8.3 LIRPF), who provide for and materialize the Canary Islands Investment Reserve (RIC) individually in proportion to their share. Materialization may be carried out both through the community of property and through the individual activities of the co-owner, pursuant to Article 27 of Law 19/1994. The materialized assets must remain in operation within the acquirer's company for five years (Art. 27.8 Law 19/1994). If the community of property ceases activity before the expiry of said period, the maintenance obligation is breached, and the co-owner must include in their total IRPF tax liability the amounts that gave rise to the incentive, plus the corresponding late payment interest (Art. 27.16 Law 19/1994).