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V2252-14 3 September 2014 · SG de Tributación de las Operaciones Financieras Criterion in force
IRPF · plan de pensiones

Pension plan benefits upon death are subject to Income Tax, not Inheritance Tax

A query was raised regarding whether a pension plan benefit received due to the death of a spouse should be taxed under Income Tax (IRPF) or Inheritance and Gift Tax. The Directorate General for Tax Assurance (DGT) ruled that these benefits are subject to Income Tax as earnings from employment.

The question raised

Whether said benefit due to death is taxed under Personal Income Tax or under Inheritance and Gift Tax.

The DGT's ruling

Pension plan benefits, regardless of the contingency covered such as death, are taxed in the recipient's Personal Income Tax as income from employment. Therefore, they are not subject to Inheritance and Gift Tax.

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