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V2205-14 7 August 2014 · SG de Tributación de las Operaciones Financieras Criterion in force
IRPF · rendimientos del capital mobiliario

Life insurance payouts are taxed as income from movable capital

A query was made regarding the tax treatment of premiums and the capital sum of a life insurance policy taken out in 1994. The DGT ruled that the taxable income is the difference between the capital received and the premiums paid.

The question raised

Taxation of said insurance in Personal Income Tax. In particular, the treatment of premiums paid and the capital to be received upon maturity.

The DGT's ruling

The capital received through life insurance contracts constitutes income from movable capital. The income is determined by subtracting the amount of premiums paid from the capital received. For premiums paid before December 31, 1994, the reduction established in the fourth transitional provision of Law 35/2006 shall apply. The resulting income shall be included in the savings tax base.

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