ARCNET

Pursuant to Article 45 1(a) of the CIRS, https://info.portaldasfinancas.gov.p...ges/irs45.aspx, the acquisition value of donated real estate is deemed to be the value upon which stamp duty is paid at the time the donation deed is executed, i.e. the VPT.

But, is this still the case when real estate is purchased by a married couple (Separação de bens) and then the wife transfers by way of donation her half share to the husband and some years later the husband transfers the half share back to the wife again by way of donation? The non-resident married couple then sell the real estate and make a capital gain each.

Applying Article 45 1(a), it would appear that the acquisition value to calculate the wife’s capital gain is the VPT at the time she received the half share back from her husband. That, however, creates a much higher gain for the wife which doesn’t represent the real monetary gain and results in significantly more CGT equating to about 74% of the actual realised gain.

Does anyone know if there is any exemption available to the married couple to disregard transfers between themselves and thus use the original purchase price as the acquisition value? That is how it is treated by HMRC in the UK Capital Gains Tax: Gifts to your spouse or charity - GOV.UK (www.gov.uk).

Alan PT

This might be of interest: https://www.eurofinesco.com/mdocs-po...cgt-and-swaps/

ARCNET

Thanks Alan PT . That made for some interesting reading but I don’t think it will assist. Ironically, the CGT benefit of that swapping regime is the pole opposite. It is because the original purchase price, which is considerably higher, is replaced by the most recent VPT when the wife received the half back from her husband that creates the CGT penalty! Swings and roundabouts I suppose.

Alan PT

Ah, sorry, best I could find. I'm afraid it's probably too complex and specific an example to get a good answer here, I fear you are in "consult an accountant" territory