Determining the acquisition value of bare ownership and usufruct for Personal Income Tax

Determining the acquisition value is a critical element for calculating capital gains or losses in Personal Income Tax (IRPF). A recent ruling from the Directorate General of Taxes (DGT) has specified how this value must be established when dealing with bare ownership and usufruct acquired for gratuitous reasons.

What the DGT has ruled

The DGT establishes that, as it is an acquisition for gratuitous reasons, the acquisition value of the bare ownership and the usufruct shall be that resulting from applying the rules of Inheritance and Gift Tax. This amount is capped at the market value.

To obtain the final acquisition value, the following elements must be considered:

• The value resulting from the application of inheritance and gift tax regulations.
• Investments, improvements, and expenses inherent to the acquisition.
• In the case of the usufructuary, said value must be reduced by the amount of tax-deductible amortizations.

What it means for you

This criterion directly affects individuals who have acquired the bare ownership or the usufruct of a property through a donation or inheritance and subsequently decide to transfer said right or the complete asset. An error in determining these values can lead to an incorrect calculation of the taxable base for capital gains, affecting the IRPF settlement.

It is fundamental to understand that the value is not an arbitrary figure, but is strictly linked to the valuation carried out in the Inheritance and Gift Tax, adjusted for expenses and improvements made.

What you should do

In the event of a future transfer of bare ownership or usufruct rights, it is necessary to have the documentation that proves the value declared in the Inheritance and Gift Tax. Likewise, all invoices for improvements and investments made should be collected to integrate them into the acquisition value. Since amortization regulations may affect the usufructuary's value, it is necessary to analyze the particular situation of each taxpayer to ensure that the calculation of the capital gain is correct.