Doctrine by topic · DGT Observatory

Improvement Pact: DGT doctrinal evolution

How the DGT's position on this topic has evolved, and the rulings it rests on.

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How the DGT's position has evolved

Settled doctrine High confidence 30 rulings · 2014–2026

Current position

Improvement pacts with present effects are considered lucrative transmissions mortis causa for the application of article 33.3.b) of the IRPF Law (Personal Income Tax Law), which prevents the existence of capital gains or losses. In the case of the award of life usufruct through these pacts, the IIVTNU (Transfer Tax and Stamp Duty) taxable event is triggered by the transmission of a real right of enjoyment. For the exemption due to reinvestment in a primary residence, the three-year period of habitual residence must be computed from the acquisition of ownership through the pact.

The DGT's position has shifted from focusing on the impossibility of accumulating improvement pacts with donations in Inheritance and Gift Tax, to defining their tax nature in the IRPF. The criterion that these pacts are lucrative transmissions mortis causa has been consolidated, which neutralizes capital gains. Recently, the doctrine has extended to the application of residence requirements for exemptions and the accrual of transfer tax.

Turning points

  1. V2235-19

    Establishes that the accumulation regulations of the LISD (Inheritance and Gift Tax Law) do not apply to succession pacts, as they are titles distinct from inter vivos donations.

  2. V3020-21

    Defines the improvement pact as a lucrative transmission mortis causa for the IRPF, eliminating capital gains or losses in operations with present effects.

Analysis based on 29 of 30 rulings with a stated position. Updated 24 September 2026.

Rulings on this topic

24
V0775-25 5 May 2025

No liable for IRPF: income from succession improvement pact

SG de Impuestos sobre la Renta de las Personas Físicas
pacto de mejorapacto sucesoriohecho imponibleincremento de patrimoniotítulo sucesorio Ley 2/2006, de Derecho Civil de GaliciaLISD — Ley 29/1987 de Sucesiones y Donaciones art. 3.1.a
Affects CompanyExpat · Non-residentIndividual
V2717-23 6 Oct 2023

No tax on capital gains from asset transfers via improvement pacts

SG de Impuestos sobre la Renta de las Personas Físicas
pacto de mejoratransmisión lucrativacausa mortisganancia patrimonialpacto sucesorio LIRPF — Ley 35/2006 del IRPF art. 33.3.bLIRPF — Ley 35/2006 del IRPF art. 36
Affects CompanyExpat · Non-residentIndividual
V2536-23 21 Sept 2023

Improvement agreements under Galician Civil Law may be subject to inheritance tax

SG de Impuestos Patrimoniales, Tasas y Precios Públicos
pacto de mejoraobligación personaldevengo anticipadotransmisión mortis causapacto sucesorio LISD — Ley 29/1987 de Sucesiones y Donaciones art. 3.1.aLISD — Ley 29/1987 de Sucesiones y Donaciones art. 3.1.b
Affects CompanyExpat · Non-residentIndividual
V0583-22 21 Mar 2022

No capital gains or losses on property transfers via improvement pacts

SG de Impuestos sobre la Renta de las Personas Físicas
pacto de mejoratransmisión lucrativacausa mortisganancia patrimonialderecho civil gallego LIRPF — Ley 35/2006 del IRPF art. 33.3.bLIRPF — Ley 35/2006 del IRPF art. 36
Affects CompanyExpat · Non-residentIndividual
V3020-21 3 Dec 2021

No capital gains tax on asset transfers via improvement pacts

SG de Impuestos sobre la Renta de las Personas Físicas
pacto de mejoratransmisión lucrativacausa de muerteganancia patrimonialpacto sucesorio LIRPF — Ley 35/2006 del IRPF art. 33.3.bLIRPF — Ley 35/2006 del IRPF art. 36
Affects CompanyExpat · Non-residentIndividual

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