Tax treatment of the gratuitous establishment of a usufruct on shares

The Dirección General de Tributos (DGT) has issued a relevant ruling regarding the tax nature of the establishment of rights of use or enjoyment, specifically usufruct, on company shares when this operation is carried out without economic consideration.

What the DGT has resolved

The inquiry addresses the treatment in Personal Income Tax (IRPF) of the gratuitous establishment of a usufruct on company shares. The advisory body has determined that this operation is classified as income from movable capital, in accordance with the provisions of Article 25.1.c) of the IRPF Law.

A fundamental aspect of the resolution is the presumption of remuneration. When the establishment is carried out gratuitously, the regulations establish that the benefit is presumed to be remunerated, pursuant to Article 6.5 of the Law. Consequently, the operation must be valued at its normal market value, as provided in Article 40.1 of the same regulation. Likewise, the DGT emphasizes that proving the gratuitous nature of the operation is a matter of fact that must be proven by the taxpayer themselves.

What it means for you

This ruling directly impacts the holder of the shares who establishes the usufruct gratuitously. Although the intention of the operation is not to receive payment, the Tax Administration will apply a valuation based on market value to determine the taxable base. This implies that the taxpayer cannot simply declare the operation as a zero-value transfer, but must instead face the presumption that there is implicit remuneration that must be taxed as income from movable capital.

What should be done

In operations of this nature, it is necessary to consider the importance of market valuation to avoid discrepancies with the Administration. Since the burden of proof regarding the gratuitous nature falls on the taxpayer, it is essential to have documentation that supports the economic reality of the operation. It is recommended to assess each particular situation to determine the exact tax impact and the method for proving the nature of the transaction.