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V3505-20 9 December 2020 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
ISD · reducción en la base imponible

Reduction for donation of shares applicable if LISD and LIP requirements are met

A taxpayer over 65 has enquired about applying a reduction in Inheritance and Gift Tax regarding the donation of shares in a family business. The DGT clarifies that to apply this reduction, it is essential to meet the exemption requirements for Wealth Tax.

The question raised

1.) Application of the reduction provided for in Article 20.6 of Law 29/1987 on Inheritance and Gift Tax.

The DGT's ruling

To apply the 95% reduction in the tax base for the inter vivos transfer of shares (Art. 20.6 LISD), it is necessary that the shares benefit from the exemption in Wealth Tax provided for in Art. 4.8.2 of the LIP. The application of the rule of non-subjectivity to Personal Income Tax for lucrative transfers (Art. 33.3.c LIRPF) is governed exclusively by the requirements of the LISD, making the requirements of regional regulations irrelevant.

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