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V2329-20 8 July 2020 · SG de Tributación de las Operaciones Financieras Criterion in force
IRPF · rendimientos del capital mobiliario

Capital received from 1988 life insurance taxed as capital gains

A taxpayer inquired about the taxation of capital received in 2017 upon the maturity of a life insurance policy taken out in 1988. The DGT clarifies that capital gains are calculated by deducting premiums from the received capital, and a reduction may apply for premiums paid before 1994.

The question raised

Question posed: Taxation of the capital received in the Personal Income Tax.

The DGT's ruling

The amounts from life insurance contracts are returns on movable capital, determined by the difference between the capital received and the premiums paid. For insurance with premiums paid before 1995, the fourth transitional provision allows for a reduction to be applied to the net return. The taxpayer must communicate the deferred capital to the insurer so that said reduction is applied to the withholding tax.

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