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V3008-17 20 November 2017 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
ISD · pacto de mejora

Improvement agreements under Galician Civil Law are subject to Inheritance and Gift Tax

A taxpayer inquired about the taxation of assets transferred by their father through an improvement agreement. The DGT ruled that this transaction is subject to Inheritance and Gift Tax rather than Personal Income Tax (IRPF).

The question raised

Taxation of the taxpayer upon delivery: Inheritance and Gift Tax and Personal Income Tax.

The DGT's ruling

The gratuitous transfer of assets through an improvement pact regulated under the Galician Civil Law constitutes a succession title subject to Inheritance and Gift Tax. As it is subject to said tax, the income shall not be subject to Personal Income Tax in order to avoid double taxation.

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