The supreme court corrects the tax office on inherited properties
The Supreme Court has established a new criterion contrary to the Tax Agency's interpretation of the value of inherited real estate, which through an 'algorithm' was raising the taxation of heirs or beneficiaries of donations. In a recent ruling, the magistrates reject that the acquisition cost for the purposes of calculating the depreciation in Personal Income Tax (IRPF) of an inherited property should be the cadastral value, as the Treasury had been applying and as the Directorate General of Taxes had been defending in its binding consultations.
The Supreme Court has established as a doctrine that the depreciation cost for personal income tax purposes of an inherited property must be that paid by the Inheritance and Gift Tax or that verified by the Administration.
The rapporteur, Judge Montero Fernández, considers that reducing depreciation in acquisitions free of charge to the expenses incurred and taxes paid for their acquisition, distorts "the regulatory provision, ignoring the correct meaning of depreciation as a univocal concept".
Thus, it considers that the depreciation or depreciation of the value of the immovable property cannot be defined as an expense and the value of that property cannot be disregarded in order to calculate the expense to be deducted, and introduces the inconsistency of contrasting different magnitudes to the detriment of the logical and systematic rules.
Until now, the acquisition value established for capital gains, governed by articles 35.1 and 36 of the Personal Income Tax Law, was the value at which the rented property was declared for ISD plus the expenses and taxes inherent to its acquisition, while the acquisition cost for calculating the depreciation of a rented property only amounted to the amount of the expenses and taxes paid.
