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V2843-16 21 June 2016 · SG de Tributación de las Operaciones Financieras Criterion in force
IRPF · plan de previsión asegurado

The 40% reduction for lump-sum withdrawals applies only once to the total of pension plans

The inquirer asks whether it is possible to withdraw a secured pension plan as a lump sum with the 40% reduction, the deadline for doing so, and whether, in the event of death, benefits are taxed under Personal Income Tax (IRPF) or Inheritance Tax. The Directorate General for Tax (DGT) responds that the reduction applies only once to the total set of plans and that benefits are taxed under IRPF, not under inheritance tax.

The question raised

Possibility of redeeming the entirety of the insured foresight plan as a lump sum with the application of the 40 percent reduction and the deadline to benefit from said reduction. Whether, in the event of death, the beneficiaries would be taxed via Personal Income Tax or via Inheritance and Gift Tax.

The DGT's ruling

The 40% reduction may only be granted to amounts received as a lump sum in a single year, applying to the entirety of pension and insured foresight plans subscribed by the same participant for the same contingency. For contingencies occurring in 2010 or earlier, the transitional regime only applies to benefits received until December 31, 2018. Benefits from insured foresight plans are considered earned income for Personal Income Tax purposes and are not subject to Inheritance and Gift Tax.

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