Donation of shares: requirements to avoid capital gains in Personal Income Tax

The Dirección General de Tributos (DGT) has issued a relevant criterion regarding the taxation of the transfer of shares through donation. The core of the issue lies in determining whether the application of tax benefits in Inheritance and Gift Tax (ISD) conditions the existence of a capital gain or loss in Personal Income Tax (IRPF).

What the DGT has resolved

The inquiry raised whether, in a donation of shares made by spouses over 65 years of age, the exemption provided for in the IRPF regulations would be applicable. The DGT has determined that for no capital gain or loss to occur in the transfer of these shares, it is essential to comply with the requirements established in Article 20.6 of Law 29/1987 on Inheritance and Gift Tax (ISD).

The criterion establishes that it is irrelevant whether the donee decides to apply the corresponding reduction in Inheritance and Gift Tax (ISD) or not. The determining factor is that the requirements of the aforementioned ISD Law are satisfied. If these conditions are met, the donee will subrogate into the values and acquisition dates of the donor for future transfers.

What it means for you

This ruling has a direct impact on the planning of the transfer of family businesses and social shares. For donors, compliance with ISD regulations is the key to preventing the donation from being considered an operation with a capital gain subject to taxation in IRPF. For the donee, subrogation into the donor's acquisition values allows for maintaining the original cost basis, which is fundamental for the calculation of future capital gains.

What should be done

In an operation of this nature, it is necessary to verify that the requirements of Article 20.6 of Law 29/1987 are strictly met. Since the application of the reduction in ISD is not binding for the exemption in IRPF, the global tax situation of the parties involved must be analyzed. It is recommended to assess each case individually to ensure that the donation structure complies with current regulations and to avoid contingencies with the Tax Administration.