Selling part of a family business, a percentage of the shares or stakes to a third party or a family member, also carries important tax implications, especially if the transaction takes place in Catalonia.
Taxation when selling part of a family business in Catalonia
Selling part of your family business, whether to a third party or another family member, may seem like a simple decision, but its tax implications are not. Depending on what is being transferred and who carries out the transaction, taxes may vary significantly. That is why it is important to clearly understand how this partial sale is taxed to avoid surprises and make informed decisions.
What exactly are you selling?
The first step is to define which part of the business you are selling:
- If you sell shares or stakes in an SL or SA, it is considered a transfer of securities.
- If what is sold are specific assets (such as premises, machinery or part of a farming operation), it is treated as a sale of assets, and the tax treatment is different.
Taxation under IRPF (individuals)
If you are an individual (for example, a partner selling part of their shares), the transaction generates a capital gain or loss, calculated as: Selling price – Purchase price (adjusted for expenses). This gain is included in the savings base of IRPF and taxed according to the following bands:
- Up to €6,000: 19%
- Between €6,000 and €50,000: 21%
- Between €50,000 and €200,000: 23%
- Between €200,000 and €300,000: 27%
- Over €300,000: 28%
Is it exempt if I sell to a child or family member?
Only in the case of a donation, not a sale, could IRPF taxation be avoided (for example, if you are over 65 and transfer the family business under certain conditions). But if there is financial compensation, even if symbolic, it is considered a sale and generates a capital gain.
What if the seller is a company?
If the transfer is made by a company (for example, a family holding), the profit is included in the accounting result and taxed under Corporate Tax, usually at the general rate of 25%. Under certain conditions (holding more than 5% of the shares and having held them for over 1 uninterrupted year), a 95% exemption of the capital gain generated by the sale may apply.
Indirect taxes
Although selling part of a family business generally involves mainly taxes on the profit obtained, it is also necessary to take into account possible indirect taxes. In principle, the transfer of company shares is exempt, but in certain specific cases, especially if real estate is involved, the transaction may be taxed. These details can make a big difference in the final cost of the sale.
- The sale of company shares between individuals is not subject to ITP or VAT, unless more than 50% of the company’s assets consist of real estate not used for economic activity (as in the case of asset-holding companies).
- In such a case, the Tax Office may consider that you are effectively selling part of a property, and tax the transaction with ITP at 10%.
Other aspects to bear in mind
- Valuation: The Tax Agency may challenge the declared price if it does not reflect market value.
- Family protocol or articles of association: Many family businesses restrict or regulate the sale of shares (pre-emption rights, consent of other partners, etc.).
- Municipal capital gains tax: does not apply to the sale of shares, but it does if urban property is transferred.
Selling part of a family business is not just a matter of numbers or percentages: it is a transaction that must be approached with planning, knowledge of the legal and tax framework, and, above all, with a long-term vision. In Catalonia, taxation can play a decisive role in the success of the operation, whether you sell to a family member or a third party.