Transfer of credit rights below face value and its impact on Personal Income Tax (IRPF)

The Directorate General of Taxes (DGT) has issued a relevant ruling regarding taxation in Personal Income Tax (IRPF) when the ownership of a credit right is transferred to a third party. This scenario is common among investor profiles operating with credit portfolios.

What the DGT has ruled

The body establishes that the transfer of a credit right entails an alteration in the composition of the taxpayer's wealth. To determine whether a capital gain or loss exists, the difference between two specific values must be calculated:

• Transfer value: The actual amount effectively received for the sale, provided that this is not lower than the market value.
• Acquisition value: The amount originally owed under the credit right.

Consequently, if the sale price is lower than the face value or the amount owed, a negative change in wealth occurs, which must be declared in accordance with Law 35/2006 on IRPF.

What this means for you

This ruling has a direct impact on individuals who invest in lending platforms or manage credit portfolios. If you decide to sell your position in a credit for an amount lower than what was originally owed to you, that difference constitutes a capital loss.

It is fundamental to understand that market value is the reference parameter for the transfer price. If the amount paid is lower than the market value, the calculation of the gain or loss could be affected by current regulations.

What should be done

When transferring these assets, it is necessary to correctly document both the acquisition value and the actual amount received. The correct determination of the difference between both values is essential to reflect the economic reality of the transaction in the IRPF tax return. Since every investment situation presents particularities, it is recommended to assess each case individually to ensure compliance with tax regulations.