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V2938-20 30 September 2020 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · nuda propiedad

Transferring bare ownership in exchange for a life annuity generates a capital gain or loss

A taxpayer transfers the bare ownership of a property in exchange for a life annuity while retaining the usufruct. The DGT rules that this transaction generates a capital gain or loss and that the annuities received are taxed as income from movable capital.

The question raised

Tax treatment of said operation in Personal Income Tax (IRPF).

The DGT's ruling

The capital gain or loss is determined by the difference between the current actuarial financial value of the annuity (provided it is not lower than the normal market value of the bare ownership) and the acquisition value. If the property is the primary residence and the transferor is over 65 years of age, the gain may be exempt. The life annuities received are considered returns on movable capital, with the yield being calculated as the percentage corresponding to the age of the annuitant at the time of establishment.

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