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V2935-17 15 November 2017 · SG de Tributación de las Operaciones Financieras Criterion in force
IRPF · rendimientos del capital mobiliario

Cancellation of a mortgage loan via life insurance treated as income from movable capital

A taxpayer inquired about the taxation of a life insurance benefit used to cancel a mortgage and provide a remaining balance. The DGT ruled that both amounts are taxed as income from movable capital.

The question raised

Taxation in the Personal Income Tax of the aforementioned benefit.

The DGT's ruling

The disability benefit received by the mortgage creditor to amortize the debt has the same tax treatment as if the beneficiary were the taxpayer themselves. Both the portion that cancels the loan and the remaining amount received are considered income from movable capital. This income is determined by the difference between the capital received and the premiums paid and forms part of the savings tax base.

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