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Practical Income Manual 2022.

Practical case

The community of property "X", whose NIF is E28000000, is made up of two community members, each of whom has a 50% participation percentage. Community member "Y" is a taxpayer for NIF and community member "Z" is a taxpayer of Corporate Tax. The community of assets has obtained the following income in fiscal year 2022:

  • 12,200 euros from the year-round rental of a home to a couple. Said property was acquired by the entity in 2000, with the acquisition cost paid by it amounting to 250,000 euros. The cadastral reference of the property is 0052807VK4724A0003KI. The cadastral value of the property in 2022 was 58,500 euros, of which 40 percent correspond to the value of the land.

    The expenses paid throughout the 2022 financial year by the entity in relation to the property have been the following:

    • I receive community: 1,100 euros.
    • Receipt IBI : 360 euros.
    • Interest derived from the financing of the property: 1,300 euros.
  • 1,200 euros, as interest derived from a fixed-term taxation of two years and one day. The settlement of the aforementioned interests occurred, upon expiration of the term, on October 2, 2022.

  • 1,800 euros, as dividends from shares of an entity resident in Spanish territory. The administration and deposit costs of the shares have amounted to 10 euros.

  • The community of goods carries out a business economic activity whose net return is determined using the direct estimation method, normal modality. According to the entity's data and accounting records, income for the year amounted to 50,000 euros, with deductible expenses, including taxable amortizations, of 20,000 euros.

  • On January 10, 2022, it sold on the stock market for 150,000 euros, discounting the expenses inherent to said transfer paid by the entity, a package of shares acquired on October 1, 1999 for 100,000 euros, including the expenses inherent to said acquisition paid by the entity.

  • On November 15, 2022, it sold for 150,000.00 euros, discounting the expenses and taxes inherent to said transfer paid by the entity, a property not affected by economic activity acquired on October 1, 2001 for an amount equivalent to 100,000 euros, including the expenses and taxes inherent to the acquisition paid by the entity. The cadastral reference of the property is 9872023VH5797S0001WX and its cadastral value, which has not been reviewed in the last 10 years, amounts to an amount of 30,500 euros in 2022. The property has been unoccupied since its acquisition.

  • The amount of withholdings and payments on account borne by the entity amounted to: 570 euros (228 made on interest and 342 euros on dividends).

Determine the income attributable by the entity to each of its members and the amounts that each of them must include in the annual declaration corresponding to their personal taxation.

Solution:

1. Determination by the entity of the income attributable to each community member according to the rules of Personal Income Tax :

1.1. Returns on real estate capital:

  • Full income: 12,200
  • Deductible expenses:
    • I receive community: 1,100
    • Receipt IBI : 360
    • Real estate financing interests: 1,300
    • Property amortization 3% s/(60% x 250,000.00) = 4,500

    Total deductible expenses: 7,260.00

  • Net return (12,200 – 7,260) = 4,940
  • Income attributable to each community member (50% s/4,940) = 2,470

1.2 Investment income:

  • Net dividend yield (1,800 - 10) = 1,790
  • Income attributable to each community member (50% s/1,790) = 895
  • Net interest yield: 1,200
  • Income attributable to each community member (50% s/ 1,200) = 600

1.3. Returns from economic activity:

  • Full income: 50,000
  • Deductible expenses, including amortizations: 20,000
  • Net return (50,000 - 20,000) = 30,000
  • Income attributable to each community member (50% of 30,000) = 15,000

1.4. Capital gains and losses (sale of shares):

  • Transfer value: 150,000
  • Acquisition value: 100,000
  • Capital gain (150,000 - 100,000) = 50,000
  • Income attributable to community member "Y" (50% s/50,000) = 25,000
  • Income attributable to community member "Z" (50% s/50,000) = 25,000

1.5. Capital gains and losses (property sale):

  • Transfer value: 150,000
  • Acquisition value: 100,000
  • Capital gain (150,000 - 100,000) = 50,000
  • Income attributable to community member "Y" (50% s/50,000) = 25,000
  • Income attributable to community member "Z" (50% s/50,000) = 25,000

1.6. Imputed real estate income (vacant property):

  • Attributable income (2% s/30,500) x (317 ÷ 365) = 529.78
  • Income attributable to each community member (50% s/ 529.78) = 264.89

1.7. Withholdings and payments on account:

  • Attributable to each of the community members (50% s/570) = 285

2. Declaration of the income attributed by the community member "Y" taxpayer of Personal Income Tax :

2.1 Return on real estate capital:

  • Attributed net return: 2,470
  • Housing lease reduction (60% s/2,470) = 1,482
  • Computable net return (2,470 - 1,482) = 988

2.2. Net return on movable capital to be included in the savings tax base:

  • Dividends
  • Full amount: 900
  • Attributable deductible expenses: 5
  • Interests:
    • Attributed net return: 600

    Total computable net return on movable capital (900 + 600 – 5) = 1,495

2.3. Performance economic activities:

  • Attributed net return: 15,000

2.4. Capital gains to be integrated into the savings tax base: (1)

  • Attributable income (25,000 + 25,000) = 50,000

2.5. Imputed real estate income:

  • Attributed amount: 264.89

Note to example:

(1) Since both cases are gains obtained from the transfer of assets (sale of shares and real estate), their amount is integrated into the savings tax base. In relation to the gains and losses that make up the savings tax base, see Chapter 11 . (Back)