Tax neutrality in the partial spin-off of business lines

The management of real estate assets within diverse corporate structures poses significant tax challenges, especially when seeking to segregate a specific activity from the company's main operations.

What the DGT has ruled

The inquiry analyzes the feasibility of applying the special tax regime for spin-offs provided for in Chapter VII of Title VII of the Corporate Income Tax Law (LIS) in a scenario involving the partial spin-off of real estate. The case presented contemplates the segregation of a business line through the creation of a new company or a capital increase of an existing one, with a shareholding exceeding 5%.

The core of the issue lies in determining whether this movement allows for the maintenance of tax neutrality, avoiding taxation on the capital gains generated in the transfer of the real estate, provided that the requirements for the continuity of the business line in the segregating company are met.

What it means for you

This criterion is relevant for companies operating with mixed models, for example, a commercial company that owns real estate assets. The possibility of applying this regime allows for:

• Segregating activities: Separating real estate management from the main commercial activity.
• Avoiding immediate taxation: Not being taxed on the capital gains of the real estate contributed at the time of the spin-off.
• Capital structuring: Using both the creation of new companies and the capital increase of pre-existing entities to accommodate the assets.

For neutrality to be effective, it is fundamental that the operation falls strictly within the assumptions of a partial spin-off and that a business line is maintained in the original company.

What should be done

The application of this regime requires a rigorous technical analysis of the corporate structure and the nature of the transferred assets. It is necessary to verify that the operation complies with the requirements of the LIS and the updates introduced by Royal Decree-Law 5/2023. Since the valuation of real estate and the continuity of the activity are critical points, it is recommended to assess each case individually to ensure compliance with current regulations.