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V3067-17 23 November 2017 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · extinción de condominio

Dissolution of co-ownership with higher value allocation generates exempt capital gains for those over 65

An 86-year-old taxpayer dissolved the co-ownership of their primary residence by allocating it entirely to their partner in exchange for financial compensation. The DGT examines whether this transaction generates a capital gain and whether such a gain is exempt.

The question raised

Whether a capital gain has been obtained in said operation. If so, it is asked whether said capital gain is exempt from taxation or if it is subject to taxation under Personal Income Tax (IRPF).

The DGT's ruling

The allocation of assets at a value exceeding the ownership share constitutes a change in assets that generates a capital gain or loss. In this case, as 100% of the property is allocated to one party, a change occurs for the other co-owner. However, as it involves the transfer of a primary residence by a person over 65 years of age, said capital gain is exempt from taxation under Personal Income Tax (IRPF).

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