Transfer of assets from personal assets to business or professional assets: affectation

Regulations: Articles 28.3 Law IRPF and 23 Regulation IRPF

Business or professional assets are made up of all those assets or rights integrated into the organizational scope of an economic activity carried out by its owner.

Private assets, on the other hand, include the rest of the assets or rights whose ownership also corresponds to the taxpayer, but which are not affected by the development of any economic activity.

The principles and rules that govern the allocation of property or rights are the following:

a. The incorporation of an asset into the economic activity from the personal assets of the taxpayer who owns it does not produce an alteration in assets for tax purposes as long as the asset continues to form part of his assets.

b. The asset is incorporated into the taxpayer's accounting for the acquisition value that it had at the time of the allocation .

This value is made up of:

• When the acquisition of the asset has been made for a fee for the sum of the actual amount for which the acquisition was made, the cost of the investments and improvements made to the asset and the expenses and taxes inherent to the acquisition, excluding interest, paid by the purchaser. This value will be reduced by the amount of tax-deductible amortization, computing in all cases the minimum amortization, regardless of whether it is actually considered an expense.

• When the acquisition of the asset has been made for profit by the owner of the activity, the previous rules will apply, although the real amount of the acquisition will be taken as the acquisition value for the purposes of the Inheritance and Gift Tax, without being able to exceed the market value.

Note: The components of the acquisition value are discussed in greater detail in Chapter 11 of this manual.

c. It will be understood that has not been affected if the asset is sold before 3 years have elapsed since this.