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V2848-18 29 October 2018 · SG de Impuestos Patrimoniales, Tasas y Precios Públicos Criterion in force
ITPAJD · comunidad de bienes

Dissolution of joint property ownership may be subject to transfer tax if avoidable excess adjudication or swaps occur

The applicant asks whether the termination of co-ownership triggers Transfer Tax and which type applies. The DGT responds that if the dissolution involves avoidable excess adjudication or compensation with assets from another community, it will be taxed as an onerous transfer of property or a swap.

The question raised

The taxpayer asks whether the extinction of the co-ownership occurs for the purposes of the Property Transfer Tax and what the applicable tax rate would be.

The DGT's ruling

In order for the dissolution of communities without business activity to be taxed solely on documented legal acts, the allocations must maintain due proportion to the ownership shares and there must be no avoidable excess in allocation. If excesses are compensated with assets from another community or if assets are exchanged between communities, it is considered a barter subject to onerous transfers of property. Furthermore, if any asset remains held pro indiviso, there is no extinction of the community but rather a barter of shares.

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