Mortis causa donations with immediate transfer do not generate capital gains for Personal Income Tax (IRPF)

The legal nature of succession agreements with present effects has raised doubts regarding their dual tax treatment. Recently, the Dirección General de Tributos (DGT) has specified how these operations must be taxed under Inheritance and Gift Tax (ISD) and Personal Income Tax (IRPF).

What the DGT has resolved

The ruling analyzes an operation involving a mortis causa donation with the immediate transfer of assets. The Administration's criteria establish that:

• In ISD: The mortis causa donation is considered a succession title. Therefore, it must be taxed following the rules applicable to acquisitions by reason of death, with the tax accruing at the moment the contract is formalized.
• In IRPF: As these are lucrative transfers derived from succession agreements with present effects, they are considered transfers by reason of death. Consequently, according to article 33.3.b of Law 35/2006 (IRPF Law), no capital gain or loss is generated.

What this means for you

If you are an individual considering a succession agreement with present effects, this criterion determines the tax burden of the operation. On one hand, the beneficiary must face Inheritance Tax under the regime for acquisitions by reason of death, which implies that the accrual occurs upon signing the contract. On the other hand, the operation is neutral for IRPF regarding capital gains, preventing the transfer of assets from generating an additional impact on the transferor's income.

What should be done

Given the complexity of succession agreements and their impact on estate planning, it is necessary to analyze the structure of the donation. The correct formalization of the contract is decisive to ensure that the regime for acquisitions by reason of death is applied rather than that of donations between living persons. It is recommended to assess each particular situation with a specialist to ensure that the transfer meets the necessary legal requirements to avoid a different tax classification.