Skip to content
V2372-22 ·16 November 2022 ·consulta-vinculante Medium impact
Tax

Unpaid annuities following death are subject to Inheritance Tax rather than Income Tax

A query was raised regarding whether outstanding payments from an economic compensation agreement following an employee's death should be subject to Income Tax (IRPF) withholding. The Directorate-General for Tax (DGT) ruled that, as these payments derive from the employment relationship but become due only upon death, they are subject to Inheritance and Gift Tax.

In 6 key points

How it affects those involved

This ruling clarifies the tax treatment of post-mortem compensation payments, shifting the tax burden from Income Tax to Inheritance Tax, which may affect the net amount received by beneficiaries.

Lifecycle

2022-11-16PublishedPublished in the BOE
Official text Based on BOE data (boe.es). Information, not advice.

Does this provision affect you?

The tax team reviews your specific situation.

Talk to the tax team
This analysis is informational only and does not constitute legal advice or create a client-adviser relationship. BM Consulting.
Email
Contact