Donations of social shares will not be taxed in Personal Income Tax if they meet ISD requirements

The application of tax benefits in the field of donations of social shares has raised doubts about the possible coexistence of benefits across different taxes. The Dirección General de Tributos (DGT) has clarified the tax treatment these operations must receive when the requirements of regional regulations are met.

What the DGT has resolved

The inquiry addresses the possibility of applying the 99% reduction provided for in the Valencian regional regulations on the donation of social shares and how this interacts with Personal Income Tax (IRPF). The binding body confirms that, if the donation of the shares meets the requirements to apply the 99% reduction in Inheritance and Gift Tax (ISD), no taxation will occur for the capital gain that would normally derive from the transfer in the IRPF.

This criterion is based on article 33.3.c) of the Personal Income Tax Law (LIRPF), which establishes that capital gains or losses shall not be considered those arising from transfers that are exempt or subject to a reduction in Inheritance and Gift Tax (ISD).

What it means for you

For donors of social shares, this criterion provides significant legal certainty. If the operation is structured in a way that meets the requirements of regional regulations to access the 99% reduction in the ISD, the donor will not have to declare the difference between the acquisition value and the donation value as a capital gain in their income tax return.

It is important to take into account that the nature of the company is a determining factor. The classification of the company's activity (whether it is development or leasing) can influence the exemption in Wealth Tax, which indirectly affects the value of the transferred assets.

What should be done

Before proceeding with a donation of shares, it is necessary to verify that all requirements demanded by regional regulations for the application of the 99% reduction in the ISD are strictly met. An error in the classification of the company's activity or in compliance with the requirements of the gift tax could lead to unexpected taxation for capital gains in the IRPF. It is recommended to assess each case individually to ensure the correct application of this tax benefit.