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V2833-21 16 November 2021 · SG de Impuestos Patrimoniales, Tasas y Precios Públicos Criterion in force
IP · impuesto sobre el patrimonio

Move to Switzerland does not bar ISD relief if LIP conditions met

A Spanish resident planning to move to Switzerland seeks fiscal impact on the Wealth Tax (IP) and Inheritance and Gift Tax (ISD) regarding a family business. The DGT clarifies that, under the Spain-Switzerland treaty, no IP tax will be due in Spain, but ISD reductions for family business transfers remain possible if IP exemption conditions are met.

The question raised

Tax implications regarding Wealth Tax and Inheritance and Gift Tax arising from the change of tax residence to Switzerland:

The DGT's ruling

Under the Convention with Switzerland, the taxpayer shall not be subject to Wealth Tax in Spain, except for specific exceptions. Reductions for family business in the IHT (inter vivos and mortis causa transfers) require exemption from Wealth Tax, which is maintained if the management and remuneration requirements are met by any member of the kinship group. The regulations applicable to the company shall be those of the Community of Madrid, as its greatest asset value is located there.

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