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V2644-23 29 September 2023 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · ganancia patrimonial

No capital gains tax on business donations if ISD Law requirements are met

A taxpayer over 65 has enquired whether donating a pharmacy to their children allows for a capital gains tax exemption. The DGT clarifies that while the donation of stock is taxed as income from economic activity, fixed assets may be exempt provided the requirements of the Inheritance and Gift Tax Law are satisfied.

The question raised

Application to the donation of a business of the exemption provided for in Article 33.3.c) of the Personal Income Tax Law.

The DGT's ruling

The donation of inventory generates full income from economic activity based on its market value. Regarding fixed assets, no capital gain or loss shall be recognized if the requirements of section 6 of Article 20 of Law 29/1987 are met, provided that the assets have been used uninterruptedly for at least five years. The application of this benefit depends on compliance with state inheritance regulations, and regional requirements or the receipt of a retirement pension are irrelevant.

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