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V2963-20 1 October 2020 · SG de Impuestos Patrimoniales, Tasas y Precios Públicos Criterion in force
ISD · reducción por transmisión de participaciones

Wealth Tax exemption is a prerequisite for the 95% reduction on the donation of shares

A taxpayer inquired whether they could apply the 95% reduction to the donation of shares in a family business. The Directorate General of Taxes (DGT) ruled that for this to apply, the shares must be exempt from Wealth Tax, which requires that management functions account for more than 50% of the taxpayer's income.

The question raised

Application of the exemption provided for in Article 4.Eight.Two of the Wealth Tax Law to the shares that are to be the subject of a donation, for the purpose of applying the reduction provided for in Article 20.6 of the Inheritance and Gift Tax Law.

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