Capital gains from the sale of shares shall be attributed to the real owner of the securities

Determining who must be taxed for a capital gain derived from the sale of shares is a critical point in family wealth management. Recently, the Dirección General de Tributos (DGT) has specified the criteria for identifying the correct taxpayer in situations where the formal ownership in the financial institution does not coincide with the real ownership of the assets.

What the DGT has resolved

The administration has established that capital gains and losses must be attributed to the person who holds the beneficial ownership of the assets. This means that the criterion of real ownership prevails over the formal ownership appearing in bank records.

In the case analyzed, the question was whether a gain obtained from the sale of shares in an account whose formal ownership belonged to a daughter, but which was managed by the mother as a representative or authorized person, should be imputed to the daughter. The DGT concludes that management by a third party is an indication of ownership that can be rebutted. For the gain to be imputed to the daughter, it is necessary to reliably prove that she was the real owner of the shares through any means of evidence admitted in Law.

What this means for you

This criterion directly impacts individuals who manage accounts for minors or family members without legal capacity. If there is a discrepancy between who appears on the bank statement and who the true owner of the funds or securities is, the Tax Agency (Agencia Tributaria) will seek the economic reality of the transaction.

The application of Law 35/2006 on Personal Income Tax (IRPF) and Law 58/2003 General Tax Law implies that mere appearance in the records of the financial institution does not guarantee the correct imputation of the tax. If the administration detects that the formal owner is not the real owner, it will require that the gain be declared by the person who effectively possesses the assets.

What should be done

In the presence of assets where formal ownership does not coincide with real ownership, it is fundamental to have documentation that supports the nature of the ownership. In situations involving the management of accounts for minors or persons under representation, the ability to demonstrate beneficial ownership is the only way to ensure that the imputation of capital gains is correct and to avoid penalties for an erroneous declaration.