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V0203-19 30 January 2019 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rendimientos del capital mobiliario

Interest from property received in lieu of payment is included in savings income

A lender received properties as a dation in payment to amortise both principal and interest. The Directorate General for Taxes (DGT) has ruled that interest received in kind must be valued at market value and is taxed as income from movable capital.

The question raised

Taxation of the dation in payment of a credit made to the taxpayer under Personal Income Tax.

The DGT's ruling

Income derived from the amortization of a loan is classified as income from movable capital obtained through the transfer of own funds to third parties. If interest is satisfied in kind, by way of dation in payment, it must be valued at its market value pursuant to Article 43.1 of the Personal Income Tax Law. This income constitutes savings income and is included in the savings tax base.

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