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V1801-18 21 June 2018 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · ganancia patrimonial

Compensations for the waiver of legal actions are not exempt if there is no judicially recognized amount

A taxpayer received funds after waiving the right to pursue legal action for personal injury. The DGT determines that, in the absence of a legally or judicially recognized amount, the sum constitutes a capital gain for Personal Income Tax purposes.

The question raised

Whether a capital gain must be attributed for Personal Income Tax purposes regarding the amount received and the temporal attribution thereof.

The DGT's ruling

For civil liability compensation to be exempt, it must correspond to personal injury and its amount must be legally or judicially recognized. A judicially recognized amount includes judicial rulings or intermediate formulas involving judicial intervention, such as a settlement or waiver. As this requirement is not met, the amount received is a capital gain that must be attributed to the year in which the waiver was formalized.

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