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V2968-19 24 October 2019 · SG de Impuestos Patrimoniales, Tasas y Precios Públicos Criterion in force
ISD · reducción en la base imponible

The 95% reduction in the donation of a professional business is applied according to the requirements of its owner

It is consulted whether, when donating a community property business, both spouses must meet the requirement that the business is their main source of income. The DGT responds that the conditions regarding age, abandonment of duties, and main source of income refer exclusively to the owner of the business.

The question raised

For the purposes of applying the 95 percent reduction, in the case of the donation of a community property asset, whether the requirement that the pharmacy business constitutes the main source of income of the donor must be met by both spouses separately or only by the owner of the business.

The DGT's ruling

To apply the 95% reduction under Article 20.6 of Law 29/1987, the conditions regarding age, abandonment of management duties, and the requirement that the business be the main source of income refer exclusively to its owner. In the case of community property, the spouse must donate their share of the ownership of the asset. The exemption in Wealth Tax for common assets applies if the requirements of habitual, personal, and direct activity by one of the spouses are met and it constitutes their main source of income.

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