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V2808-17 31 October 2017 · SG de Tributación de las Operaciones Financieras Criterion in force
IRPF · seguro de vida

Life insurance survival benefits are not subject to Income Tax if already taxed under Inheritance and Gift Tax

A query was raised regarding whether the receipt of life insurance survival benefits should be subject to Personal Income Tax (IRPF) if they have already been taxed under Inheritance and Gift Tax. The Directorate General for Taxes (DGT) ruled that, because the policyholder is different from the beneficiary, the benefit is subject to Inheritance and Gift Tax rather than Income Tax.

The question raised

Treatment of the insurance benefit in Personal Income Tax, taking into account that it has already been subject to self-assessment for Inheritance and Gift Tax.

The DGT's ruling

When the policyholder and the beneficiary are different persons, the amounts derived from an insurance contract are subject to Inheritance and Gift Tax. As they are subject to said tax, the income shall not be subject to Personal Income Tax. In this case, the survival benefit constitutes a gift subject to Inheritance and Gift Tax.

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