The Constitutional Court has issued a statement in which it advances part of the ruling and the sentence, arguing that there is no double taxation because the economic capacity taxed in the Personal Income Tax (IRPF) is different from that taxed in the Inheritance and Gift Tax (ISD). In relation to whether the “apartación” is considered to be an own or other people’s gain, it is emphasized that the Personal Income Tax Law applies a similar rule to other gratuitous transfers and that the legislator has the margin to configure the principle of economic capacity according to technical tax reasons. Regarding the lack of differentiation between those who carry out these operations in an elusive manner and those who do not, the Court recalls that article 14 of the Constitution does not guarantee unequal treatment. Regarding the differentiated treatment with the common inheritances, the sentence emphasizes that the inheritance agreements or contracts have effects in the present, which the legislator can legitimately consider when applying a different tax treatment from that of the transmissions by death. Finally, the criticism on the retroactive application of the new regime is dismissed, since the income derived from the transfer of the property received by “apartación” is generated at the time of its alienation and must be taxed according to the regulations currently in force, not the one existing at the time of its acquisition.
The lack of a specific rule in the Personal Income Tax Law generated doubts as to whether the delivery to the “set aside” implied a capital gain subject to taxation, as in donations, or was more similar to a typical hereditary transfer, in which the capital gain is not taxed. Law 11/2021, on measures to prevent and fight against tax fraud, introduced a rule that establishes that the capital gain generated in inheritance agreements or contracts will be taxed if the property received is transferred before five years or the death of the “apartante”. This avoids avoidance of the capital gains tax that arises when an asset is transferred during life.
The Xunta de Galicia challenged this modification arguing that it generates a double taxation and makes the “set aside” person pay tax on a capital gain that does not belong to him, but to the “set aside” person. In addition, it considers that this is an unjustified discrimination between transfers based on the time elapsed or if the transferor is deceased, which would violate the principle of equality. It also questions why transfers derived from inheritance agreements or contracts are taxed with the capital gains tax, while typical inheritance transfers are exempt from taxation. Finally, it is argued that the retroactive application of the new regime from the entry into force of Law 11/2021 is contrary to the principle of non-retroactivity established in the Constitution.
Since the legislator has decided to exclude the “capital gain of the dead” from the IRPF taxable base, the challenged article, which does not extend this favorable treatment to the sections, is discriminatory in comparison with those who inherit at the death of the deceased (who can sell the inherited property without being taxed in the IRPF for the difference in value between the acquisition by the deceased and the sale by the heir) and those who inherit through a succession pact renouncing their legitimate share, who assume this tax burden by being treated, in tax terms, as the deceased.
It is considered that the justification of preventing tax evasion in the case of the sale of the property acquired by the section before the death of the deceased or within five years from the signing of the contract, on the basis of which it is intended to explain this difference in treatment, is based on an irrefutable presumption that there is always a fraudulent intent, without distinguishing between those who have this intention to avoid taxes and those who, without fraudulent intent, legitimately opt for this institution, rooted in the Galician Foral Law.
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