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V3545-20 ·11 December 2020 ·consulta-vinculante Medium impact
Tax

Inheritance Tax is not a capital loss, but may increase the acquisition value

A query was raised regarding whether Inheritance and Gift Tax payments can be treated as capital losses for Personal Income Tax (IRPF) purposes, and how compensation for professional negligence is taxed. The DGT ruled that the tax does not constitute a capital loss, but it does increase the acquisition value of assets. Furthermore, compensation for financial damages is considered a capital gain subject to taxation.

In 6 key points

How it affects those involved

This ruling clarifies the tax treatment of inheritance costs and professional indemnity, preventing taxpayers from incorrectly deducting inheritance tax as a capital loss while confirming that compensation for damages is taxable income.

Lifecycle

2020-12-11PublishedPublished 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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