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V2516-17 5 October 2017 · SG de Impuestos Patrimoniales, Tasas y Precios Públicos Criterion in force
IP · seguro de vida

Life insurance policies without surrender value are not subject to Wealth Tax

A query was raised regarding whether a single-premium unit-linked endowment life insurance policy should be subject to Wealth Tax. The Directorate General of Taxes (DGT) ruled that, as the policy has no surrender value during its term, it should not be included in the holder's taxable assets.

The question raised

Taxation of this insurance contract in Wealth Tax

The DGT's ruling

Life insurance policies are calculated based on their surrender value at the time the tax accrues. If the policy does not recognize surrender rights, the insured party cannot demand early termination nor dispose of the amount of the mathematical provision. Therefore, in cases where no surrender value exists, the life insurance shall not be subject to Wealth Tax.

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