B Law & Tax
12 July 2023

Tax advisor: The time spent living with the children in shared custody does not affect the minimum for descendants in Personal Income Tax

In cases of shared custody after a nullity, separation or divorce sentence, both parents are entitled to apply the minimum for descendants in equal parts, as established by the Central Economic Administrative Court (TEAC) in its resolution of May 29, 2023. The ruling determines that there is no legal basis for attributing to only one of the parents the totality of the minimum for descendants based on an alleged cohabitation with the children.

In the appeal filed by the Management Department of the Tax Agency, it is highlighted that the Personal Income Tax Law equates cohabitation with dependency in its article 58, unless the provisions of articles 64 and 75 of the same law are applied.

Therefore, even if one of the parents has sole custody of the children, if the other parent pays alimony, he/she can choose between applying the minimum for descendants or continuing with the alimony regime. If the latter option is chosen, the minimum would be divided between both parents. This is established in the consultations made to the Directorate General of Taxes (DGT) in files V2505-16, V2090-18 and V2823-18.

In addition, it is important to remember that the Central Economic-Administrative Court, in its resolution of September 11, 2014, establishes that in cases of separation or divorce, the minimum for descendants will correspond to the parent who has custody of the children on the date of accrual of the tax. However, it also states that it will be divided equally when custody is shared, regardless of which parent the children live with on the accrual date.

Consequently, the Chamber upholds the objection filed by the Management Department of the State Tax Administration Agency against the interpretation made by the Regional Economic-Administrative Court of Aragon in its resolution of April 29, 202.

The TEAC establishes a unification of criteria to determine that, in cases of shared custody, the right to apply the minimum for descendants regulated in article 58 of the Personal Income Tax Law (LIRPF) corresponds to both parents equally.

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