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V3068-17 23 November 2017 · SG de Impuestos Patrimoniales, Tasas y Precios Públicos Criterion in force
ISD · titularidad de disposición

Removing a joint holder from a joint account may constitute a taxable gift if the funds were common property

A taxpayer inquired whether removing a joint holder from a joint bank account constitutes a gift. The Directorate General for Taxes (DGT) ruled that this depends on the actual ownership of the funds: if the money belonged to both parties, removing one holder implies a gift of the other's share; if the money belonged solely to the taxpayer, there are no tax implications.

The question raised

Whether it is understood that a donation exists or if it is an operation that does not entail a tax liability.

The DGT's ruling

Joint ownership of disposal rights in indistinct accounts does not determine the ownership of the funds, which must be proven according to the internal relationships between the holders. If the funds belonged to both, the exclusion of a joint holder constitutes a donation of their portion of the ownership interest to the taxpayer. In such a case, Inheritance and Gift Tax is accrued, with the taxpayer being the taxable person in their capacity as the donee.

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