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V1319-19 6 June 2019 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · ganancia patrimonial

Compensation for termination of lease agreement is taxed as a capital gain in Personal Income Tax

A tenant receives compensation for terminating a rental contract and seeks advice on how it should be taxed. The Directorate General for Taxes (DGT) rules that this amount constitutes a capital gain subject to the savings tax base.

The question raised

Taxation of the aforementioned compensation under Personal Income Tax.

The DGT's ruling

The receipt of compensation for the termination of a lease agreement constitutes an alteration in the composition of assets that generates a capital gain. As it derives from a contract signed before December 31, 1994, the transitional regime of the ninth transitional provision of the Personal Income Tax Law applies. The acquisition date for this calculation is the date of subrogation into the contract. The gain shall be included in the savings tax base.

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