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V1718-18 18 June 2018 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · reducción de capital

Capital reduction with return of contributions does not allow for the exemption for reinvestment in life annuities

The taxpayer asks whether the exemption for reinvestment in life annuities can be applied in the event of a capital reduction with a return of contributions. The DGT responds that, since it does not result in a capital gain but rather in income from movable capital, the exemption is not applicable.

The question raised

Question posed: Possibility of applying the exemption set forth in Article 38.3 of Law 35/2006.

The DGT's ruling

The return of contributions that does not derive from undistributed profits shall reduce the acquisition value of the shares. If the amount exceeds said value, the excess is taxed as income from movable capital. Given that the exemption under Article 38.3 of the LIRPF is designed for capital gains from the transfer of assets, it does not apply when the amount obtained is classified as income from movable capital.

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