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V2172-20 ·29 June 2020 ·consulta-vinculante Medium impact
Tax

Contract rescission triggers capital gains tax under penalty clause

The taxpayer seeks clarification on the tax implications of a court-ordered rescission of a real estate sale and purchase agreement due to non-payment, involving a penalty clause. The Directorate General for Taxes (DGT) rules that the rescission has retroactive effects and generates a capital gain equivalent to the amount of the indemnity.

In 6 key points

How it affects those involved

The ruling clarifies that indemnity payments received following the retroactive termination of a contract must be treated as capital gains for Personal Income Tax (IRPF) purposes.

Lifecycle

2020-06-29PublishedPublished in the BOE
Official text Based on BOE data (boe.es). Information, not advice.

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This analysis is informational only and does not constitute legal advice or create a client-adviser relationship. BM Consulting.
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