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V0263-22 14 February 2022 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · ganancia patrimonial

Court-awarded compensation is treated as a capital gain and does not allow deduction of legal or expert fees

A taxpayer inquired whether they could deduct legal, expert, and solicitor fees from a court-awarded compensation payment. The DGT ruled that the compensation constitutes a capital gain and that such expenses are not deductible as they are considered consumption expenditure.

The question raised

1.- Taxation of the compensation received and the possibility of reducing the capital gain obtained by the legal, expert, and court representative fees.

The DGT's ruling

The compensation received for damages is classified as a capital gain, quantified by its own amount as it does not derive from a transfer. Legal, expert, and court representative fees cannot reduce said gain as it is a case of consumption income. Furthermore, the gain must be included in the general tax base and taxed in the fiscal year in which the judgment becomes final.

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