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V2598-17 13 October 2017 · SG de Impuestos Patrimoniales, Tasas y Precios Públicos Criterion in force
ISD · reducción por sucesiones

Inheritance tax reduction lost if sale of shares to own company allows for consumption of funds

A query was raised regarding whether transferring inherited shares to a company of which the heir is the sole owner breaches the maintenance requirement. The DGT ruled that if the proceeds are consumed, there is no maintenance of value, resulting in the loss of the tax reduction.

The question raised

Whether a breach would occur regarding the maintenance requirement provided for in the state regulations of the Inheritance and Gift Tax.

The DGT's ruling

The maintenance of the acquisition requires the preservation of value, prohibiting acts that substantially diminish the value of the acquired asset. It does not affect the requirement to transfer shares to a company of which the heir is 100% owner if the value applicable to the reduction is maintained. However, if the amount paid by the company is consumed by the transferor, the economic effect is equivalent to a sale to a third party, resulting in a lack of value maintenance and the loss of the right to the reduction.

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