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V3159-21 21 December 2021 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
ISD · reducción en la base imponible

Inheritance and Gift Tax reduction unavailable if donor is under 65

A donor under the age of 65 intends to gift company shares to their son. The DGT has ruled that neither the 95% reduction in Inheritance and Gift Tax nor the exemption from capital gains tax under Personal Income Tax (IRPF) can be applied, as the donor does not meet the age or disability requirements.

The question raised

1.) Whether the donee can apply the relief established in Article 20.6 of the Inheritance and Gift Tax Law and whether the consultant is entitled to the exemption in Wealth Tax.

The DGT's ruling

To apply the 95% reduction in Inheritance and Gift Tax (Art. 20.6 LISD), it is a necessary condition that the donor is 65 years of age or older, or suffers from absolute permanent disability or severe invalidity. As this requirement is not met, the exemption from capital gains in Personal Income Tax provided for in Article 33.3.c) of the LIRPF is also not applicable. Nevertheless, according to the facts, the consultant and his son would meet the requirements for the exemption in Wealth Tax.

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