Skip to content
Back to index
V1644-17 26 June 2017 · SG de Tributación de las Operaciones Financieras Criterion in force
IRPF · rendimientos del trabajo

40% reduction applicable to pension plan benefits received as a lump sum (subject to certain requirements)

A taxpayer inquired whether they and their siblings could apply the 40% reduction to a pension plan lump sum following their father's death. The Directorate General for Taxes (DGT) ruled that this is possible for the portion of contributions made up to 31 December 2006, provided that the relevant temporal requirements are met.

The question raised

Whether he and his siblings may apply the 40 percent reduction to the lump sum received.

The DGT's ruling

Pension plan benefits are considered earned income. If received as a lump sum, a 40% reduction may be applied to the portion corresponding to contributions made until December 31, 2006, provided that more than two years have elapsed since the first contribution. This reduction may only be applied once per taxpayer within the same tax period. For contingencies occurring in 2016, the reduction may only be applied to benefits received until the close of the 2018 tax year.

Book your free first meeting