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V3187-23 11 December 2023 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · donación

No capital gains or losses shall be recognised on the donation of an economic activity if certain requirements are met

A 78-year-old individual seeks advice on the tax treatment of donating their real estate leasing business to their children. The DGT clarifies that, provided the requirements of the Inheritance and Gift Tax Act are satisfied, no capital gain or loss will be deemed to have occurred for the donor.

The question raised

Tax treatment of said donation in Personal Income Tax.

The DGT's ruling

In the transfer of assets used for an economic activity by way of donation, a capital gain or loss shall be generated. However, the non-existence of a capital gain or loss shall be presumed if the transfer pertains to an individual enterprise or professional business in favor of descendants and meets the requirements of paragraph 6 of Article 20 of Law 29/1987. To this end, the assets must have been used for the activity uninterruptedly for at least five years prior to the transfer.

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