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

Succession planning through mortis causa donations with immediate transfer raises questions regarding their tax treatment in both Inheritance and Gift Tax (ISD) and Personal Income Tax (IRPF). The Dirección General de Tributos (DGT) has specified the regulatory framework for these operations.

What the DGT has resolved

The DGT establishes that a mortis causa donation with immediate transfer constitutes a succession title that must be taxed under the mortis causa acquisition modality. The accrual of this tax occurs at the moment the document is signed.

Regarding Inheritance and Gift Tax (ISD), the administration points out that the reduction provided for in Article 20.2.c) of the Inheritance and Gift Tax Law (LISD) is not applicable, given that the deceased has not passed away at the time of the operation. On the other hand, regarding IRPF, the ruling determines that there is no capital gain or loss, as the operation is considered a lucrative transfer by reason of death, in accordance with Article 33.3.b) of the Personal Income Tax Law (LIRPF).

What it means for you

If you are an individual using this mechanism to organize your estate, you must take into account that the operation has a specific treatment that distinguishes it from a conventional lifetime donation. Since it is a transfer for succession purposes, the tax impact shifts toward succession regulations and does not generate the capital gains effect that asset transfers usually produce in IRPF.

What is advisable to do

Since the nature of these donations directly affects the tax burden of the transfer and the application of possible reductions, it is necessary to assess the structure of the operation before its formalization. The correct application of the tax scale specific to the mortis causa modality and the timing of the accrual are critical elements for the legal certainty of succession planning.