Calculation of capital gains on the transfer of inherited bare ownership

Determining capital gains or losses for Personal Income Tax (IRPF) is a critical aspect when disposing of real estate. Recently, the Dirección General de Tributos (DGT) has clarified the rules for calculating these values when the object of the transfer is the bare ownership of a property acquired through inheritance.

What the DGT has ruled

The inquiry addresses the methodology for establishing acquisition and transfer values for Personal Income Tax (IRPF) purposes. According to the tax authority's criteria, the acquisition value of the inherited bare ownership must consist of the following concepts:

• The value assigned according to the rules of the Inheritance and Gift Tax, subject to the market value limit.
• The proportional amount of the Inheritance and Gift Tax paid.
• The expenses and taxes inherent to the acquisition.

On the other hand, the transfer value is defined as the actual amount of the disposal, provided that it is not lower than the market value. From this amount, the expenses and taxes inherent to the transfer that have been paid by the transferor must be deducted.

What it means for you

If you are an individual who has received the bare ownership of a property through inheritance and decides to sell it, you cannot use any value arbitrarily. The regulations require a precise integration of acquisition costs, including the proportional part of the inheritance tax and the expenses associated with the succession process. An error in determining these values can lead to an incorrect IRPF settlement, directly affecting the resulting capital gain or loss.

What you should do

In an operation of this type, it is necessary to document and keep all receipts for the expenses and taxes paid both during the acquisition (inheritance) and the transfer (sale). It is fundamental to verify that the market value is correctly applied at both stages to comply with current regulations. Since each succession situation presents particularities in the assignment of values, it is recommended to assess each case individually to ensure compliance with tax obligations.