Free contributions of private property

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Legal advice from Carlos Baos: Free contributions of private property. Credit: Shutterstock

A decision by the Spanish Supreme Court has removed any doubt that might still exist. Contributions free of charge of private property, made by one of the spouses, for the benefit of the conjugal society are not taxable. At least with regard to the Tax on Donations (DI) and the Tax on Expensive Patrimonial Transfers and Documented Legal Acts (ITP-AJD). We analyze the main reason below.

Contrary to popular belief, community of property between spouses is not a partnership in which each spouse holds 50% of the property. The community of goods or conjugal society is characterized by being a community of goods of Germanic character. As it was by the Supreme Court decision. What exactly does this mean? Mainly, that both spouses own, at the same time, 100 percent of the assets without either of them having a specific percentage or share in the assets.

This nuance is of vital importance. The Supreme Court decision relies on this factor to invalidate the interpretation of the tax authorities which would claim that these contributions to the partnership are taxable. Why? Firstly because, according to no law, partnerships do not constitute a taxable person. Secondly, because when a spouse makes a contribution to the community of property, this contribution does not affect the private sphere of the other spouse. It is integrated into the patrimony of the conjugal society and not into the private patrimony of the other spouse. For this reason, the transaction is not subject to either tax.

What happens with the municipal Plusvalía? According to the law governing local finances, it is also not subject to this tax. Does the ruling also apply to personal income tax? Although the judgment does not expressly mention this tax, in view of the above, it seems clear that its reasoning could also apply to the IRPF. In other words, there would be no capital gain, nor should these contributions be subject to tax.

If you would like to know more about the taxation of contributions to the common heritage, do not hesitate to contact us. We will study your case and give you expert advice to minimize your tax bill.

You may be interested in the following services and items:

Economic matrimonial regime. Do I have a right to the goods purchased by my spouse?

How to claim what has been paid out of the property of the spouse or partner in the event of divorce or separation.

The importance of knowing your matrimonial regime. Post and prenuptial agreements in Spain.

Carlos Baos (Lawyer)

White & Baos.

Tel: +34 966 426 185

E-mail: [email protected]

White & Baos 2022 – All rights reserved.


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