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Practical manual for Income Tax 2023.

In general: transfer of unlisted securities

Specific valuation standard

When the alteration in the value of assets results from the transfer for consideration of securities not admitted to trading in any of the regulated securities markets defined in Directive 2014/65/EU of the European Parliament and of the Council, of May 15, 2014, relating to financial instrument markets ( OJEU of June 12), which are representative of the participation in the equity of companies or entities, the capital gain or loss will be computed by the difference between its acquisition value and the transmission value.

Please note that article 37.1.b) of the Personal Income Tax Law refers to the values defined in Directive 2004/39/ EC of the European Parliament and of the Council of 21 April 2004 on markets in financial instruments, but this Directive has been repealed with effect from 3 January 2017 by Directive 2014/65/ EU of the European Parliament and of the Council, of May 15, 2014, relating to markets in financial instruments. This, in its article 94, provides that references to Directive 2004/39/EC will be understood to be made to Directive 2014/65/ EU .

• Transmission value

The transfer value shall be considered, unless there is proof that the amount actually paid corresponds to what independent parties would have agreed upon under normal market conditions, to be the highest of the following two:

  1. The value of the net worth corresponding to the transferred securities resulting from the balance sheet corresponding to the last fiscal year closed prior to the date of accrual of IRPF .

  2. The result of capitalizing at a rate of 20 percent the average of the results of the three fiscal years closed prior to the accrual date of IRPF . For this purpose, dividends distributed and allocations to reserves, excluding those for adjustment or updating of balance sheets, will be recorded as profits.

    The transfer value thus calculated will be taken into account to determine the acquisition value of the securities or shares that corresponds to the purchaser.

    This rule is not applicable when, as the participating company was incorporated in the first or second financial year closed prior to the date of accrual of IRPF , as of this last date the results of "the three financial years closed prior to the date of accrual of IRPF" are not available.

    On the contrary, this rule is applicable when the participating company has been inactive, not obtaining a loss or profit in any or some of the three fiscal years closed prior to the accrual date of the IRPF , and the result of the fiscal year or years in which it had been inactive must be taken as null, and then averaging by three. Resolution of the Economic-Administrative Court (TEAC) of April 26, 2022, Claim number 00/7287/2021, issued in an extraordinary appeal for the unification of criteria.

• Acquisition value

The following particularities must be taken into account when determining the acquisition value:

  1. Acquisition value in case of transfer of subscription rights .

    To determine the acquisition value of the shares transferred, only the amount of the subscription rights transferred before March 23, 1989, the date of entry into force of Royal Decree-Law 1/1989, of March 22 ( BOE of March 23) will be deducted.

    The alienation of preferential subscription rights derived from this class of shares determines that the amount obtained is in any case considered a capital gain for the transferor in the tax period in which said transfer occurs, without being able to compute, in these cases, an acquisition value of said rights and for which the period between the moment of acquisition of the value from which the right comes and the moment of the transfer of the latter will be taken as the permanence period.

  2. Acquisition value of partially paid-up shares .

    In the case of partially paid-up shares, the acquisition value of the same will be the amount actually paid by the taxpayer.

  3. Purchase value of fully paid shares .

    In the case of fully paid-up shares, the acquisition value, both of these and of those that come after, will be the result of dividing the total cost between the number of shares, both the old ones and the corresponding paid-up ones. The latter will have, for the purposes of the permanence period, the same seniority as the shares of origin.

• Identification of the transmitted titles

In order to individualize the securities sold, especially when not all of those owned have been transferred, the Law establishes a special criterion, according to which when there are homogeneous securities and not all of them are sold, it is understood that those transferred by the taxpayer are those that acquired first (FIFO criterion).