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V3261-23 19 December 2023 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · ganancia patrimonial

No capital gains tax on share donations if Inheritance and Gift Tax requirements are met

A taxpayer over 65 enquired whether donating company shares to their son would exempt them from declaring capital gains in their Personal Income Tax (IRPF). The Directorate General for Taxes (DGT) ruled that the exemption applies provided the requirements of Article 20.6 of the Inheritance and Gift Tax Act are satisfied.

The question raised

Whether the provisions of article 33.3.c) of the Personal Income Tax Law may be applicable to the donation.

The DGT's ruling

In order for there to be no capital gain or loss in the transfer of shares, the requirements of paragraph 6 of article 20 of Law 29/1987 must be met. This includes that the donor is 65 years of age or older, that they cease to perform management functions (except for mere membership on the Board of Directors), and that the donee holds the acquired assets for ten years. The application of this exemption in Personal Income Tax (IRPF) is independent of whether or not the donee applies the reduction to the taxable base of the Gift and Inheritance Tax (ISD).

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