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V3263-18 ·26 December 2018 ·consulta-vinculante Medium impact
Tax

Cancelling an inherited mortgage debt through insurance triggers a capital gain for Income Tax purposes

Consultants queried whether an insurance payout received by a bank to cancel an inherited mortgage debt should be taxed under Inheritance Tax or Income Tax. The Directorate-General for Taxes (DGT) ruled that the debt must be valued for Inheritance Tax purposes at the time of death, and that the subsequent cancellation via insurance constitutes a capital gain for Income Tax purposes.

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2018-12-26PublishedPublished 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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