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V2754-20 10 September 2020 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · ganancia patrimonial

No capital gains or losses on business donations if Art. 20.6 ISD Law requirements are met

A query was raised regarding whether the donation of an agricultural holding allows for exemption from capital gains tax under Personal Income Tax (IRPF). The Directorate General for Taxes (DGT) ruled that non-taxability applies provided the requirements of Article 20.6 of the Inheritance and Gift Tax Law are satisfied.

The question raised

Whether the provisions of Article 33.3.c) of the Personal Income Tax Law are applicable to the donation.

The DGT's ruling

The non-existence of capital gains or losses is estimated in the gratuitous transfers of businesses or holdings referred to in Article 20.6 of Law 29/1987. To this end, the assets used for the activity must have been used continuously for at least five years prior to the transfer. This criterion applies whenever the requirements of said article of the ISD are met, regardless of whether the donee applies the reduction or not.

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