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V3204-20 27 October 2020 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · ganancia patrimonial

No capital gains or losses on share donations if ISD requirements are met

A taxpayer over 65 wishes to donate shares in a limited company to their children, who already hold a small stake in the business. The DGT has ruled that no capital gain or loss will arise for Income Tax purposes provided the requirements of Article 20.6 of the Inheritance and Gift Tax Law are satisfied.

The question raised

Whether the provisions of Article 33.3.c) of the Personal Income Tax Law are applicable to the donation.

The DGT's ruling

In order for there to be no capital gain or loss for Personal Income Tax purposes arising from the transfer of shares, the requirements of paragraph 6 of Article 20 of Law 29/1987 must be met. The application of this rule is independent of whether the donee applies or does not apply the reduction to the taxable base of the Gift and Inheritance Tax. Likewise, the fact that the donees already hold a small shareholding in the company does not prevent the application of this article.

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