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A taxpayer inquired whether funds contributed to a relative's protected assets could be used for medical and food expenses within the same year without losing the tax reduction. The Directorate General for Taxes (DGT) ruled that spending money on vital needs is not considered a disposal of assets, provided the effective constitution of the assets is maintained.
This ruling provides legal certainty for caregivers and relatives managing protected assets, confirming that essential spending does not trigger the loss of tax benefits associated with contributions to protected assets.
The tax team reviews your specific situation.
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