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V3151-20 22 October 2020 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · extinción del condominio

Dissolution of co-ownership triggers capital gains or losses if the allocation exceeds the ownership share

Three siblings wish to dissolve the co-ownership of a property, where one retains the house and the others receive cash. The DGT indicates that the division of common property does not affect net wealth if the corresponding share is allocated; however, if assets are allocated at a value exceeding the share, a capital gain or loss is triggered.

The question raised

Taxation of the extinction of co-ownership in Personal Income Tax.

The DGT's ruling

The dissolution of a community of property does not constitute a capital alteration if the adjudication corresponds to the ownership share of each co-owner. However, if assets or rights are adjudicated at a value higher than the ownership share, a capital alteration occurs for the other co-owners. This alteration generates a capital gain or loss, regardless of whether cash compensation exists or not.

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