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V2678-20 2 September 2020 · SG de Impuestos Patrimoniales, Tasas y Precios Públicos Criterion in force
ISD · reducción en la base imponible

95% reduction in gift tax on shares requires leasing activity to be classified as an economic activity

The taxpayer asks whether a 95% reduction in Inheritance and Gift Tax can be applied to the donation of company shares. The DGT states that for this to apply, the shares must be exempt from Wealth Tax, which requires the company's leasing activity to be classified as an economic activity.

The question raised

Compliance with the conditions provided in Article 20.6 of Law 19/1987 on Inheritance and Gift Tax to apply the 95 percent reduction of the tax base in the proposed donation.

The DGT's ruling

To apply the 95% reduction on the donation of shares, the exemption in Wealth Tax must be met. In the case of real estate leasing activities, such activity is only considered economic if at least one person is employed under a full-time employment contract. If the entity manages real estate assets without meeting this personnel requirement, it shall not be entitled to the exemption or the donation reduction.

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