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V0247-24 29 February 2024 · SG de Tributación de las Operaciones Financieras Criterion in force
IRPF · rendimientos del trabajo

Collective insurance benefits are taxed as employment income for the beneficiary

A taxpayer has enquired about the taxation of a collective insurance policy that must be partially distributed to an ex-spouse following the liquidation of matrimonial property. The DGT clarifies that the benefit is taxed entirely as employment income for the beneficiary, regardless of how it is divided following a divorce.

The question raised

First Question: Taxation upon the cancellation of the insurance. Second question. Applicability of the reduction for compensatory pensions. Documentary obligations arising from the delivery or receipt of the insurance in favor of the former spouse.

The DGT's ruling

Benefits from collective insurance policies that establish pension commitments are taxed under Personal Income Tax (IRPF) as employment income for the beneficiary. This taxation applies to the total amount received, regardless of how the dissolution of the community property regime was carried out. The insurance entity must apply the corresponding withholding tax in accordance with tax regulations.

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