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V2584-19 22 September 2019 · SG de Impuestos Patrimoniales, Tasas y Precios Públicos Criterion in force
ITPAJD · disolución de comunidad de bienes

Acquisition of co-ownership shares subject to transfer tax on onerous patrimonial transfers, not documented legal acts

The applicant inquired whether the termination of a co-ownership arrangement is subject to the 'documented legal acts' tax modality. The Directorate General for Taxes (DGT) ruled that if the transaction does not dissolve the community but instead reduces the number of co-owners through the acquisition of shares, it is taxed as an onerous patrimonial transfer.

The question raised

Whether the extinction of the co-ownership would be subject to the documented legal acts modality.

The DGT's ruling

The dissolution of communities of property without business activity is only taxed as documented legal acts if the allocations maintain the proper proportion and there are no avoidable excesses in allocation or excesses compensated with something other than money. If unavoidable excesses in allocation occur or if they are not compensated in cash, they are taxed as onerous transfers of assets. In the event that the operation does not extinguish the community but rather reduces the number of co-owners (such as the acquisition of a third party's share), it constitutes an onerous transfer of assets.

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