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V3393-20 23 November 2020 · SG de Impuestos Patrimoniales, Tasas y Precios Públicos Criterion in force
ISD · reducción de la base imponible

Receiving a life annuity as a former director does not prevent the 95% reduction on donations

A query was raised regarding whether receiving a life annuity after serving in a management role prevents the application of the 95% reduction on the donation of shares. The DGT ruled that the requirement is met provided the donor effectively ceases their duties and stops receiving remuneration for performing them.

The question raised

Compliance with the conditions provided in Article 20.6 of Law 19/1987 on Inheritance and Gift Tax to apply the 95 percent reduction to the tax base in the proposed donation.

The DGT's ruling

To apply the 95% reduction on the donation of shares, the donor must cease their management functions and stop receiving remuneration for said role. The receipt of life annuities, retirement pensions, or income arising from having performed functions in the past does not prevent the reduction, provided that there is no actual exercise of management functions.

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