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V2800-19 10 October 2019 · SG de Impuestos Patrimoniales, Tasas y Precios Públicos Criterion in force
ISD · reducción en la base imponible

Contribution of shares to a new holding company does not breach the ISD reduction maintenance requirement

Consultants inquired whether contributing donated shares to a new holding company breaches the obligation to maintain assets acquired for the ISD reduction. The DGT ruled that the contribution does not constitute a breach, provided there is no substantial reduction in the value of the acquisition.

The question raised

1st.- Whether the planned non-monetary contribution constitutes a breach of the requirements of Article 20.6 of the LISD.

The DGT's ruling

The non-monetary contribution of shares to a new holding entity does not constitute a breach of the requirement to maintain the acquired assets provided for in Article 20.6.c) of the LISD. However, to preserve the reduction, other requirements must be met: not carrying out corporate operations that substantially diminish the value of the acquisition and maintaining the right to the exemption in Wealth Tax for ten years. If the bare owner is a legal entity, the consolidation of ownership upon the death of the usufructuary shall be taxed under Corporate Income Tax.

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