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V2763-17 27 October 2017 · SG de Impuestos Patrimoniales, Tasas y Precios Públicos Criterion in force
ISD · reducción por empresa familiar

Inherited shares with family business relief can be sold if proceeds are reinvested

A query was raised regarding whether selling shares in a family business received through inheritance affects the requirement to maintain the tax reduction. The DGT ruled that this is possible, provided the amount is reinvested in other assets to maintain the acquisition value.

The question raised

Whether certain operations with the proceeds of the disposal could affect the maintenance requirement established by the Law.

The DGT's ruling

To maintain the reduction under Article 20.2.c) of Law 29/1987 following the sale of shares, the immediate reinvestment and materialization of the amount in assets is required to maintain the original value. Materialization in investment funds or real estate does not affect the requirement if the sum reaches the value for which the reduction was applied. In the event of a cash contribution to an entity to acquire real estate, the fungible nature of money could make proving the maintenance of value difficult.

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