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V1770-14 8 July 2014 · SG de Impuestos Patrimoniales, Tasas y Precios Públicos Criterion in force
ISD · seguro de vida unit linked

Survivors are not liable for inheritance tax if they are not beneficiaries of the life insurance benefit

A query was raised regarding whether the surviving holder of a unit-linked life insurance policy must pay Inheritance Tax on the policy rights. The DGT indicates that if the survivor is not entitled to receive the benefit and is not a beneficiary, they are not liable for such tax.

The question raised

Exemptions or reductions applicable to the mortis causa transfer of the portion of the policy corresponding to one of the holders, to the surviving holder, who is also jointly insured in the same life insurance policy, in the event that both holders are not married to each other, and in the event that both co-holders are spouses.

The DGT's ruling

When the policyholder and the beneficiary coincide, the benefit is taxed under Personal Income Tax; if they do not coincide, it is taxed under Inheritance and Gift Tax. If the policyholder and the surviving insured party do not have the right to receive the benefit following the death of the other, they are not the beneficiary of the insurance and should not pay Inheritance Tax. Specific tax benefits depend on the regulations of the corresponding Autonomous Community.

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