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V0934-23 20 April 2023 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · ganancia patrimonial

Compensation and aid for the destruction of real estate due to volcanic eruption may be exempt from Personal Income Tax

A usufructuary asks how the compensation from the Insurance Compensation Consortium should be distributed between her and the bare owners following the destruction of real estate due to a volcanic eruption. The DGT responds that the sum of aid and compensation is considered a single exempt aid, and that the distribution depends on the allocation by the Consortium or the market value of the usufruct.

The question raised

Distribution of the compensation between the applicant and her children for Personal Income Tax purposes.

The DGT's ruling

The sum of insurance compensation and public aid for the destruction of assets is considered a single aid exempt from Personal Income Tax. To determine the capital gain or loss, the acquisition value (including improvements) is subtracted from the compensation and aid received. In the case of usufruct, the portion corresponding to the usufructuary is determined according to the distribution by the Consortium or, failing that, by the market value of the usufruct at the time of the loss.

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