c) Lucrative "inter vivos" transfers (donations) of companies or shares
This assumption refers to donations in favor of the spouse, descendants or adopted children, individual companies or shares in entities of the donor to which the 95% reduction contemplated in section 6 of article 20 of Law 29/1987, of December 18, on the Tax on Inheritances and Donations is applicable ( BOE of December 19).
Article 20.6 of Law 29/1987, of December 18, on the Tax on Inheritances and Donations, provides :
6. In cases of transfer of shares "inter vivos", in favor of the spouse, descendants or adopted children, of a sole proprietorship, a professional business or of shares in entities of the donor to which the exemption regulated in the eighth section of article 4 of Law 19/1991, of June 6, on Wealth Tax is applicable, a reduction in the taxable base will be applied to determine the taxable amount of 95% of the acquisition value, provided that the following conditions are met:
a) That the donor was sixty-five years of age or older or was permanently disabled, either absolutely or severely disabled.
b) That, if the donor were to perform management functions, he would cease to perform and receive remuneration for the performance of said functions from the time of the transfer.
For these purposes, mere membership of the Board of Directors of the company shall not be deemed to be included among management functions.
c) As for the donee, he/she must keep what he/she has acquired and be entitled to exemption from the Wealth Tax for ten years following the date of the public deed of donation, unless he/she dies within this period.
Likewise, the donee may not carry out acts of disposal and corporate operations that, directly or indirectly, may give rise to a substantial reduction in the value of the acquisition. This obligation will also apply in cases of acquisitions "mortis causa" referred to in letter c) of section 2 of this article.
In the event that the requirements referred to in this section are not met, the portion of the tax that was not paid as a result of the reduction applied and the late payment interest must be paid."
Regarding article 4.8 of Law 19/1991, of June 6, of the IP referred to in the transcribed article 26.6, see the section "Business and professional assets" of the general exemptions of article 4 of the aforementioned Law, within Chapter 2 of the Practical Manual of the Wealth Tax 2023.
In the case of assets that are allocated by the taxpayer to economic activity after their acquisition, they must have been allocated uninterruptedly for at least five years prior to the date of transfer.
In these acquisitions, the donee will be subrogated in the position of the donor with respect to the values and dates of acquisition of said assets (Art. 36 Law IRPF ).