Joint taxation: minor children with investment income

The management of income earned by minors raises frequent questions within the scope of Personal Income Tax (IRPF). A recent ruling from the General Directorate of Taxes (DGT) has clarified the possibility of integrating these minors into the joint tax return of the family unit when their income exceeds certain thresholds.

What the DGT has resolved

The inquiry focused on determining whether children could file a joint tax return with their parents for the 2025 tax year. The criteria establish that those minor children who obtain investment income exceeding the exclusion limits provided for in Article 96 of the IRPF Law (Law 35/2006) acquire the status of taxpayers obligated to file a return.

As taxpayers, the regulations allow these minors to opt for joint taxation with their parents. However, for this option to be valid, it must encompass all members that make up the family unit. In this scenario, the income of all group members will be subject to cumulative taxation.

What this means for you

This resolution has a direct impact on families whose minor children manage assets, such as the sale of shares, that generate significant income. If the minor reaches the legal limits for filing, they cease to be a mere beneficiary of their parents' deductions and become a taxpayer with their own obligations.

The possibility of joint taxation implies that the minor's income will be added to that of the parents to determine the common taxable base. This requires an analysis of the global tax burden, as the sum of incomes may alter the tax rate applicable to the family unit.

What should be done

When investment income arises for minors, it is necessary to evaluate the tax situation of the entire family unit. It must be verified whether the volume of the child's gains mandates the filing of a tax return and whether the option for joint taxation proves beneficial after calculating the accumulated taxable base. Given the complexity of the regulations, it is fundamental to assess each particular situation to determine the most appropriate option according to the volume of income of each member.