Individualisation of income corresponding to dividends from shares acquired in community of property

The question arises as to whether dividends on shares acquired with community property money should be individualised.

Firstly, the tax authorities state that, in order to resolve the question, they consider that the shares in question are considered to be community property.

It is appropriate to attribute the capital gains (dividends) produced by the shares to the community of co-owners as the material owner, irrespective of who appears as the formal owner of the shares.

Although formal ownership determines in principle the ownership of the person making the enquiry, this circumstance may be undermined if the existence of other owners, in this case the community of joint owners, is proven. This would mean attributing the securities that have given rise to the income from movable capital on a 50/50 basis between the two spouses.

We must remember the individualisation of yields

Capital gains are considered to be obtained by the owner of the assets from which they derive (real estate, securities, etc.).

Therefore, the income must be attributed to the owner or usufructuary.

Similarly, expenses are deductible by the person to whom the income corresponds, provided that they are actually incurred on his or her account.

In order to determine the ownership of the assets (not the ownership of the income deriving from them), the following rules must be taken into account:

1. This ownership is determined in accordance with the rules on legal ownership applicable in each case and on the basis of the evidence provided by them or discovered by the administration.
2. Where applicable, the rules on legal title to assets and rights contained in the provisions governing the matrimonial property regime, as well as in the provisions of civil law applicable in each case to the property relations between the members of the family, are applicable.
3. The ownership of the assets and rights which, according to the provisions or agreements regulating the corresponding matrimonial property regime, are common to both spouses, must be attributed in half to each of them, unless another share is justified.
4. If the ownership of the assets or rights is not duly accredited, the tax authorities are entitled to consider as the owner the person who appears as such in a tax or other public register.

If you have any doubts about this subject, please do not hesitate to contact us, by telephone to Carles Monfort Codina or by e-mail to cmc@btsasociados.com, we will be delighted to help you.