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V1909-20 12 June 2020 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · ganancia patrimonial

Reductions for assets acquired before 1994 or exemptions via life annuity payments may apply

An individual over 65 is inquiring whether capital gains from the sale of land acquired in 1975 are exempt or eligible for reductions. The DGT clarifies the transitional regime for assets acquired before 1994 and the exemption applicable when proceeds are reinvested into a life annuity.

The question raised

Whether the resulting capital gain is exempt or, where applicable, whether it is possible to apply any of the reductions provided for in the Personal Income Tax Law (LIRPF).

The DGT's ruling

The transfer generates a capital gain that is integrated into the savings tax base. A reduction may be applied to the portion of the gain generated before January 20, 2006, pursuant to the ninth transitional provision, depending on whether the transfer value is less than 400,000 euros. Likewise, the gain may be exempt from taxation if the sale proceeds are used, within six months, to establish an insured life annuity in favor of a taxpayer over 65 years of age.

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