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V4835-16 10 November 2016 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · ganancia patrimonial

Donating a property generates a capital gain or loss for Income Tax purposes

A taxpayer inquired whether donating a property to her daughter would have implications for her Personal Income Tax (IRPF). The Directorate General for Taxes (DGT) ruled that the donation results in a capital gain or loss for the donor, whereas for the daughter, the acquisition is subject to Inheritance and Gift Tax.

The question raised

Whether the donation of an estate to a daughter has effects on her Personal Income Tax, or does not, as recent court rulings have held.

The DGT's ruling

The donation of the estate generates a capital gain or loss for the donor due to the variation in their assets. If a loss occurs through a gratuitous transfer, it shall not be accounted for. The amount of the gain is determined by the difference between the acquisition and transfer values according to the rules for gratuitous transfers. The acquisition by the donee is not subject to Personal Income Tax as it is subject to Inheritance and Gift Tax.

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