Transfer of assets from business or professional assets to personal assets: disaffection
Regulations: Articles 28.3 Law PIT and 23 RegulationsPIT
Principles and rules of deregistration
The principles and rules for the disaffection of assets or rights are as follows:
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The transfer of fixed assets from the business sphere to the personal sphere of taxpayer does not produce any alteration in assets as long as the asset continues to form part of its assets .
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The incorporation of the asset or right into the personal assets is carried out for the net book value of the same on the date of the transfer .
The components of book value are discussed in Chapter 11.
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The deregistration does not require any lapse of time to be understood as completed from the moment it is carried out.
Notwithstanding the foregoing, if the declassified asset is sold before 3 years have elapsed since the declassification, even if this would have occurred as a result of the cessation of the activity, the reduction percentages will not be applicable referred to in the ninth transitional provision of the Law of PIT in determining the capital gain obtained.
The ninth transitional provision of the Law of PIT, establishes a special reduction regime applicable to capital gains derived from the transfer of unaffected assets and those unaffected more than three years prior to the date of transfer, acquired before December 31, 1994. The detailed commentary on this transitional regime of reduction of capital gains is contained in Chapter 11.
Example:
Dr. FRG, a dentist, opened his practice on January 1st. 2025 in a premises owned by him which has remained rented since its acquisition until December 31, 2017 and between 12/31/17 and 12/31/19 has been designated for his own use, said date being recorded in his investment property register book.
The aforementioned premises were acquired by Mr. FRG on May 1, 1985 for the equivalent of 60,000 euros, the owner also paying the equivalent of 5,000 euros in the form of Tax on Property Transfers and Documented Legal Acts, notary and Property Registry.
During the years in which the premises were rented, the acquisition value of the property was higher than its cadastral value.
To determine the depreciation base, the value of the land is estimated to be equivalent to 18,000 euros.
On May 31st 2025 He moved his practice to another location, proceeding to rent the previous premises again for 900 euros per month.
Determine the tax treatment of these operations and whether the premises can be considered as being used for the business activity during the fiscal year 2025.
Solution:
1. Impact on the premises (01-01-2025):
The commercial premises being used for professional activity is understood to have been used on January 1st. 2025, upon fulfillment from that date of the requirements of necessary and exclusive use of the premises for the development of the activity and for accounting.
The incorporation of the premises into the investment property register must be carried out for the following value:
Actual acquisition amount: 60,000
Expenses and taxes inherent to the acquisition: 5,000
Total: 65,000
Less: Tax amortization deductible (01-05-1985 to 31-12-2017) (1)
Year 1985: (47,000 x 1.5%) x 8/12 = 470
Years 1986 to 1998: (47,000 x 1.5%) x 13 = 9,165
Years 1999 to 2002: (47,000 x 2%) x 4 = 3,760
Years 2003 to 2017: (47,000 x 3%) x 15 = 21,150
Total amortizations: 34.545
Value of affectation (65,000 – 34,545) = 30,455
Note:
(1) For the purposes of determining the depreciation base, the value of the land (18,000 euros) has been discounted. Likewise, the percentage of amortization for the years 1985 to 1998 was taken as 1.5%, which was the tax deductible while the premises were rented in the aforementioned years. For the financial years 1999 to 2002, the percentage applicable is 2 per 100 [Article 13.2, letter a) of the Regulations of the PIT [in force in the aforementioned years]. For the financial years 2003 to 2017, the applicable percentage is 3 per 100 [for the financial years 2003 to 2006, article 13.2, letter a), of the Regulations of thePIT in the wording given to it by Royal Decree 27/2003, of January 10, and for the years 2007 to 2017, article 14.2, letter a) of the Regulation of the PIT]. (Back)
2. De-affectation of local (31-05-2025) (2)
When the premises were decommissioned on May 31st of the year 2025, the incorporation of the same into the personal assets of the owner will be carried out at the net book value of the premises on that date. This value is determined as follows:
Value of impact = 30,455
Less: Repayments (01-01-2025 May 31st2025) (3)
Year 2025: (12,455 x 3%) x 5/12 = 155.69
Total amortizations: 155.69
Net book value (30,455 – 155.69) = 30,299.31
Notes:
(2) The relocation of the consultation to another location on May 31st 2025 This implies its removal from the economic activity carried out by its owner. However, the subsequent rental of the premises does not prevent it from being considered as fully affected during the period in which the consultation was located (from January 1st). 2025 as of May 30 2025). (Back)
(3) The tax-accountable depreciations coincide with those made by the owner of the activity and correspond to the maximum linear coefficient of depreciation for this type of asset, assuming that it determines the net income by simplified direct estimation. Maximum coefficient for buildings, according to simplified table: 3 per 100. The value of the land (18,000 euros) is not subject to amortization. Consequently, the amortizable value is 12,455, the difference between 30,455 (value of allocation) and 18,000 (value of the land). (Back)