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V1329-24 7 June 2024 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · responsabilidad solidaria

Payment of debt as a joint and several liable party only constitutes a capital loss once the right of reimbursement is exhausted

A query was raised regarding whether the payment of tax debts under joint and several liability can be recorded as a capital loss for Personal Income Tax (IRPF) purposes. The Directorate General for Taxes (DGT) ruled that payment does not automatically generate a loss, as a right of claim exists against the principal debtor; a loss only occurs once all possibilities for reimbursement have been exhausted under the conditions set by law.

The question raised

Possibility of imputing a capital loss in the Personal Income Tax return and, where applicable, the tax period of imputation.

The DGT's ruling

The payment of the debt by a jointly and severally liable party does not constitute an automatic capital loss due to the right of reimbursement against the principal debtor. A capital loss is understood to have occurred when the legal possibilities of obtaining said reimbursement are exhausted. For its imputation, the circumstances of overdue and uncollected credits provided for in Article 14.2 letter k) of the Personal Income Tax Law must concur.

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