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V2791-18 24 October 2018 · SG de Impuestos Patrimoniales, Tasas y Precios Públicos Criterion in force
ISD · sustitución fideicomisaria

Trustee taxed on full ownership for ISD and IIVTNU, with taxation for beneficiaries suspended

A query was raised regarding the taxation of fideicommissary substitutions in Inheritance and Gift Tax (ISD) and the Tax on the Increase in Value of Urban Land (IIVTNU). The DGT ruled that the trustee must pay based on full ownership if they have the power to dispose of the assets, whereas the obligation for the beneficiaries remains suspended until the death of the trustee.

The question raised

Taxation under the Inheritance and Gift Tax and the Tax on the Increase in Value of Urban Land.

The DGT's ruling

In the Inheritance and Gift Tax, if the trustee can dispose of the assets, they shall settle the tax on full ownership. Upon the death of the trustee, the beneficiaries shall be taxed at current values and rates, inheriting directly from the original decedent. The heirs of the trustee may request a refund of the portion corresponding to the bare ownership, which shall form part of the trustee's estate. In the Tax on the Increase in Value of Urban Land, the trustee is the taxable person for the transfer of property, whereas the taxation of the beneficiaries remains suspended until the death of the trustee and the transfer of the land.

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