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V2729-23 6 October 2023 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
ISD · reducción de la base imponible

Cannot apply 95% reduction to shares donated between siblings

The DGT states that the 95% reduction in Inheritance and Gifts Tax does not apply to donations of shares to siblings, as it is only available for donations to spouses, descendants or adopted children.

The question raised

Whether the various donations of shares in entity A in favor of PF4 meet the requirements to apply the 95% reduction of the Inheritance and Gift Tax taxable base.

The DGT's ruling

The 95% reduction in the Inheritance and Gift Tax taxable base, pursuant to Article 20.6 of the LISD, is limited to transfers in favor of spouses, descendants, or adoptees. As the donees are siblings (collaterals), they do not meet the subjective scope of the rule. Therefore, they are not entitled to the proposed tax relief.

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