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2021 Wealth Tax practical guide.

8. Business and professional assets.

Regulations; Art. 4.Ocho.1 Wealth Tax Act. See also Articles 1 to 3 of Royal Decree 1704/1999 of 5 November, which determines the requirements and conditions of business and professional activities and of holdings in entities for the application of the corresponding exemptions in Wealth Tax

Business and professional assets are exempt, which includes the assets and rights of the individuals required to carry out their activity economic, business or professional, provided that the taxpayer exercises his/her usual, personal and direct role and constitutes his/her main source of income.

The application of the exemption is conditional on the fact that the following requirements are met at the date of accrual of the tax (31 December):

  1. That the assets and rights are subject to the development of an economic, business or professional activity, under the terms of article 29 of the Personal Income Tax Act and 22 of the Regulations of that tax.

    It will be understood that the lease of real estate constitutes economic activity when the requirements of article 27,2 of the Personal Income Tax Act are met, i.e. when at least one person employed with a full-time employment contract is used for the purposes of arranging the property.

    The criteria for affecting goods and rights in the exercise of an economic activity are discussed in Chapter 6 of the Personal Income Tax Manual

  2. The economic, business or professional activity to which these assets and rights are subject is carried out on a regular basis, personally and directly by the taxpayer.

    However, the goods and rights common to both spouses will be exempt when they are used in the course of the business or professional activity of any of them, provided that the other requirements required by law are met.

  3. That the economic, business or professional activity is the main source of income for the taxpayer.

    Business or professional activity will be understood to be the main source of income when at least 50% of the amount of the 100 General tax base and savings on the taxpayer's Personal Income Tax, sum of the boxes [0435] and [ 0460] of the Personal Income Tax declaration, comes from net income from the business or professional activities in question.

    For the purposes of calculating the main source of income, the remuneration for the management functions carried out in the entities of which, where applicable, holdings are held exempt from this tax, or any other remuneration that may result from the taxpayer's participation in these entities.

    In the case of transfers of family company shares, in order to apply the exemption from Wealth Tax, the remuneration received by the taxpayer must be compared with the algebraic sum of all the net reduced income from work and business and professional activities.

  4. When the same taxpayer exercises two or more business or professional activities on a regular basis, personal and direct basis, the exemption will reach all the goods and rights under these conditions, considering that the main source of income is determined by all the company or professional income of all of them.

Note: In the case of minors or disabled persons who are holders of the affected assets, the requirements set out in the previous 2 and 3 º numbers will be considered fulfilled when their legal representatives comply with them.


Mr. A.H.C. He/she regularly carries out a business activity in 2021, which has obtained net returns of 29,000 euros. The general tax base and the savings of Personal Income Tax declared by Mr. A.H.C. In that financial year it amounts to 60,000 euros. The value of all the assets and rights associated with the economic activity carried out, for the purposes of Wealth Tax, is 200,000 euros.

Mr. A.H.C. During 2021, he received a total of 3,000 euros for the performance of certain executive functions entrusted to him by the Board of Directors of an entity in which he has holdings exempt from Wealth Tax.

Determine whether the assets and rights of Mr. A.H.C. As part of the business activity carried out by the company, they are exempt from Wealth Tax in 2021.


For the calculation of the main source of income of Mr. A.H.C. The remuneration received for management functions performed at the entity of which it has holdings exempt from Wealth Tax is not taken into account. Therefore, on 50% of the taxpayer's general tax base and personal income tax savings amount to: 100

50% Of (60,000-3,000) = 28,500 euros

The net return on this financial year's activity amounts to 29,000 euros, which is higher than 50% of the taxpayer's taxable income base. 100 Therefore, the assets and rights associated with the business activity are exempt from Wealth Tax in 2021.

Comment: Depending on a certain level of income, it may happen that the same taxpayer has the right to exemption in a given financial year and not in the following year.