Crypto-assets in Wealth Tax and the Solidarity Tax on Large Fortunes

In Wealth Tax (IP), what is already settled must be separated from what still requires analysis. The valuation rule is firm; the rest of the wealth analysis of a large crypto holding is considerably more nuanced than the usual regional summaries suggest.

Valuation: a clear criterion, with systematic anchoring still residual

The DGT has indicated, in rulings such as V0250-18, of 1 February 2018, and V0590-18, of 1 March 2018, that bitcoins and other cryptocurrencies must be declared in Wealth Tax at their market price on the accrual date, that is, 31 December. The construction matters: the DGT treats crypto-assets in the same way as foreign-currency holdings and channels them into the residual rule of Article 24 LIP —“all other assets and rights of economic content […] shall be valued at their market price on the accrual date”—, which is the exact wording of the statute. That part can already be stated as an operational rule: the euro value of the position at year-end is declared, regardless of the year’s fluctuations.

Where some caution is advisable is in the systematic anchoring within the Wealth Tax Act, because there is no provision designed specifically for crypto-assets and the technique remains, in part, one of fitting them into the residual categories of assets and rights of economic content. Put another way: the valuation is clear; other questions, such as the holding structure or the effect of residence, require additional analysis.

IP and the Solidarity Tax on Large Fortunes: joint analysis is no longer optional

The old popular formula —“Madrid rebates 100%, Andalusia rebates 100%, so there is no wealth tax”— must be abandoned. While the Solidarity Tax on Large Fortunes (ITSGF) remains in force, serious analysis cannot be done by looking only at the regional IP rules.

Law 38/2022 configures the ITSGF as a direct state tax complementary to the IP, whose taxable event reaches net worth above €3,000,000, although the taxable base is further reduced by a tax-free threshold of €700,000 —which Royal Decree-law 8/2023 extended to all taxpayers, including non-residents under limited (real) liability—, so that effective taxation does not begin at €3,000,000 but at €3,700,000 of net worth. It allows the IP charge for the year actually paid to be deducted. Its purpose is precisely to avoid double taxation and to ensure a minimum level of tax where the regional rebate leaves part of the net worth effectively untaxed. The practical consequence is clear: in a region that rebates the IP, what is not paid in IP may end up being paid, largely, in ITSGF. For that reason, any wealth analysis of large crypto holdings must calculate both taxes jointly for the specific tax year, with the state and regional rules in force. It should be noted, however, that the ITSGF itself has a joint cap with IRPF and IP parallel to that of Article 31 LIP (Article 3.Twelve of Law 38/2022): the sum of the charges may not exceed 60% of the IRPF tax bases, with a reduction that may not exceed 80% of the ITSGF charge. In highly illiquid crypto holdings, or those without recurring income, that cap may significantly reduce the effective charge, so that what is not paid in IP does not always end up being paid, far less in full, in ITSGF. Any regional summary that ignores that approach ages very quickly.

The joint IP–IRPF cap and the family business: precision, not slogans

Article 31 of the Wealth Tax Act remains a central tool for high net worth: the gross IP charge, together with the IRPF charges, may not exceed 60% of the sum of the latter’s tax bases, with a reduction that may not exceed 80% of the IP charge. In relevant crypto holdings, this rule is an important analytical lever, but not an automatic mechanism: its application depends on the specific composition of the year’s income. It should also be noted that the Article 31 calculation excludes the portion of the charge attributable to elements that, by their nature or purpose, are not capable of producing income for IRPF purposes (Article 31.One.b LIP), which in non-productive crypto holdings conditions the result.

It is also worth dispelling a frequent misunderstanding about the family-business exemption of Article 4.Eight.Two of the Wealth Tax Act. There is no universal rule requiring, for any entity, a full-time employee. What matters is compliance with the legal conditions of participation, the exercise of management functions, the remuneration and the non-asset-holding nature of the entity. The employee requirement belongs to other contexts —most especially the letting of property— and should not be extrapolated as a catch-all to any company that merely holds assets.