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V0231-24 29 February 2024 · SG de Tributación de las Operaciones Financieras Criterion in force
IRPF · rendimientos de capital mobiliario

Life insurance benefits taxed as investment income or capital gains depending on their nature

A taxpayer queried the tax treatment of life insurance benefits received following a court ruling (disability, critical illness, and premium refunds). The DGT ruled that disability benefits are treated as investment income, critical illness benefits as capital gains, and premium refunds are not taxable.

The question raised

Taxation of the amounts received.

The DGT's ruling

The benefit for absolute permanent disability is considered income from movable capital, calculated as the difference between the capital received and the premium for the current year. The benefit for critical illness is classified as a capital gain, calculated as the difference between the benefit and the premium for the current year. The refund of premiums does not constitute income subject to Personal Income Tax (IRPF). Benefits must be attributed to the tax period in which the judicial sentence becomes final.

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