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Practical Heritage Manual 2023.

Rules

1. For the purposes of determining the amount of the taxable base for savings of IRPF , the following rules must be applied:

  1. ## The portion of the aforementioned taxable savings base that corresponds to the positive balance of capital gains and losses obtained from transfers of assets acquired or improvements made to them more than one year prior to the date of the transfer will not be taken into account, the amount of which will be entered in box [32] of the Wealth Tax return.

    To determine this amount, the net balance of capital gains and losses obtained in the year arising from the transfer of assets acquired more than one year prior to the date of the transfer must first be calculated.

    If the previous balance was negative or zero, zero will be entered in box [32].

    If the balance is positive, the positive net balance of capital gains and losses attributable to 2023 must be taken into consideration to be included in the savings tax base (box [0424] of the IRPF declaration), and, where applicable, the offset of the following balances.

    • Negative net balance of capital gains attributable to 2023 to be included in the savings tax base (with a limit of 25% positive net balance of capital gains and losses attributable to 2023). Box [0436]

    • Negative net balances of capital gains and losses for 2019, pending offset as of January 1, 2023, to be included in the taxable savings base. Box [0439]

    • Negative net balances of capital gains and losses for 2020, pending offset as of January 1, 2023, to be included in the taxable savings base. Box [0440]

    • Negative net balances of capital gains and losses for 2021, pending offset as of January 1, 2023, to be included in the taxable savings base. Box [0441]

    • Negative net balances of capital gains and losses for 2022, pending offset as of January 1, 2023, to be included in the taxable savings base. Box [0442]

    • Remaining negative net balances of capital gains from 2019, pending offset as of January 1, 2023, to be included in the savings tax base, with a limit of 25% of the positive net balance of capital gains and losses attributable to 2023. Box [0443]

    • Remaining negative net balances of capital gains from 2020, pending offset as of January 1, 2023, to be included in the savings tax base, with a limit of 25% of the positive net balance of capital gains and losses attributable to 2023. Box [0444]

    • Remaining negative net balances of capital gains from 2021, pending offset as of January 1, 2023, to be included in the savings tax base, with a limit of 25% of the positive net balance of capital gains and losses attributable to 2023. Box [0445]

    • Remaining negative net balances of capital gains from 2022, pending offset as of January 1, 2023, to be included in the savings tax base, with a limit of 25% of the positive net balance of capital gains and losses attributable to 2023. Box [0447]

    If the difference between the amount in box [0424] and the amounts of the sum of boxes [0436] and [0439] to [0445] and [0447] is equal to zero, then box [32] of the Wealth Tax return shall be entered as zero.

    If the difference between the amount in box [0424] and the amounts of the sum of boxes [0436] and [0439] to [0445] and [0447] is positive, and the balance of capital gains and losses arising from the transfer of assets acquired more than one year prior to the date of the transfer (GyP>1) is equal to or greater than the amount entered in box [0424] of the IRPF declaration , in box [32] of the Wealth Tax declaration the difference between the amounts entered in boxes [0424] and the sum of boxes [0436] and [0439] 21## [0445] and ## ##22##[0447] of the declaration will be recorded from IRPF .

    If the difference between the amounts in box [0424] and the amounts of the sum of boxes [0436] and [0439] to [0445] and [0447] is positive, and the balance of capital gains and losses arising from the transfer of assets acquired more than one year prior to the date of the transfer (GyP>1) is less than the amount entered in box [0424] of the IRPF declaration , in box [32] of the Wealth Tax declaration, the amount resulting from the following operation will be recorded.

    (Profit and Loss >1 ÷ Box [0424] ) x (Boxes [0424] - [0436] - [0439] - [0440] - [0441] - [0442] - [0443] - [0444] - [0445] - [0447] )

  2. The amount of dividends and profit shares obtained by holding companies will be added, regardless of the entity that distributes the profits obtained by the aforementioned holding companies. 

    In accordance with the provisions of letter a) of section 1 of the tenth transitional provision of Law 27/2014, of November 27, on Corporate Tax ( BOE of November 28), dividends and profit shares received by taxpayers of IRPF and obtained by holding companies are not included in the taxable base of IRPF nor are they subject to withholding or payment on account of said tax.

2. For the purposes of determining the full savings quota of IRPF the part of said quota corresponding to the positive balance of those obtained from the transfers of assets acquired or improvements made to them more than one year prior to the date of the transfer will not be taken into account, the amount of which will be entered in box [35] of the Wealth Tax return and which is the result of the following operation:

Box [35] = (Quotas corresponding to the taxable base of savings Boxes [0540] - [0541] ÷ taxable base of savings Box [0460] ) x Box [32]

3. For the purposes of determining the full amount of the Wealth Tax , the part of the full amount corresponding to assets that, due to their nature or purpose, are not likely to generate taxable income in the Personal Income Tax will not be taken into account.

For the purposes of determining the assets that are excluded from the calculation of the limit of the full quota referred to in article 31.One.b) of the Wealth Tax Law, their “nature or purpose” at the time of the accrual of the Wealth Tax must be taken into account.

In this sense, clearly unproductive assets such as works of art and antiques, jewellery, boats and cars for private use, undeveloped land, etc. are excluded.

However, apart from the clearly unproductive assets that we have referred to in the previous section, it should be noted that the purpose assigned by the owner to an asset may be decisive in its capacity to generate income. For these purposes, following the Supreme Court ruling of March 16, 2011, appeal no. 212/2007 ( ROJ : STS1346/2011) which, in its FJ5, established that “from the literal meaning of this article it follows that the inclusion or exclusion derives from the nature or destination of the assets, at the time to which the liquidation refers, regardless of whether at a later time they may be subjected to operations that accrue returns ”, it is considered that, if the taxpayer's assets, at the time the Wealth Tax accrual occurs, are not likely to produce returns taxed by the Personal Income Tax Law , they will not be taken into account within the calculation of the limit of article 31 of the Wealth Tax Law, regardless of whether at a later time they may be subjected to or destined for operations that accrue returns.

However, the determination of the assets that are likely to produce income is a question of fact, and therefore must be determined, in any case, by the Administration managing the tax, in view of the specific circumstances of the assets in each specific case.

Without prejudice to the above, it should be noted that in the case of the habitual residence, to the extent that the properties are assets that by their nature are capable of generating income, the value of this exceeds the maximum amount of 300,000 euros declared exempt in article 4. Nine of the Wealth Tax Law must be computed as part of the tax base for the purposes of calculating the limit of the full quota.

The magnitude of the full quota corresponding to unproductive assets (CIBI) can be determined using the following formula:

 CIBI = EPN x Total Amount ÷ Taxable Base

CIBI being the full quota corresponding to unproductive assets and EPN the net value of the assets not susceptible to producing returns in the IRPF . That is, the value of such assets or rights reduced, where applicable, by the amount of the deductible debts corresponding to them and the proportional part of the debts that, while equally deductible, are not linked to any specific asset.

If the 60% limit is exceeded, said excess must be reduced by the Wealth Tax rate, but the reduction may not exceed 80% of said rate. That is, a non-reducible minimum rate is established for the Wealth Tax equivalent to 20% of the full rate of the Tax itself.

Note: the quota limit established in article 31.1 of the Wealth Tax Law is not applicable to non residents who have opted in accordance with the provisions of article ) of the aforementioned Wealth Tax Law, for the personal obligation to contribute to said tax, since by not paying taxes in the IRPF, there is no possibility of adding the remaining full quotas in taxes and putting in relation to percentage of the base of the IRPF