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V1806-22 29 July 2022 · SG de Tributación de las Operaciones Financieras Criterion in force
IRPF · seguro unit linked

Free transfer of life insurance policyholder status may trigger capital gains tax

An individual transferred the status of policyholder of a unit-linked life insurance policy to their son free of charge. The Directorate General for Taxes (DGT) has ruled that this operation constitutes a transfer for consideration, which may generate a capital gain for the transferor under Personal Income Tax (IRPF).

The question raised

Taxation of the transfer of the status of policyholder in the Personal Income Tax of the taxpayer.

The DGT's ruling

The transfer of ownership of a life insurance policy entails the transfer of the policyholder's economic rights. As it is a transfer for consideration, it constitutes a change in assets that may generate a capital gain. The amount of the gain shall be the difference between the transfer value (determined according to the rules of the Inheritance and Gift Tax) and the acquisition value (the premium paid, reduced by the amount of the sum at risk consumed).

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