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V3007-17 20 November 2017 · SG de Tributación de las Operaciones Financieras Criterion in force
IRPF · ganancia patrimonial

Capital gains from property sales may be exempt if used to establish a life annuity

A 76-year-old taxpayer inquired whether using proceeds from a property sale to establish a life annuity would exempt the capital gain from taxation. The Directorate General for Taxes (DGT) ruled that this is possible, provided all legal requirements are met and the reinvestment limit is respected.

The question raised

1. Whether the establishment of the new annuity would serve to exclude from taxation the capital gain derived from said sale.

The DGT's ruling

Individuals over 65 years of age may exclude from taxation capital gains arising from the transfer of assets if they allocate the actual proceeds from the disposal, net of expenses and taxes, to the establishment of a life annuity within six months. The maximum limit for applying this exemption is 240,000 euros, which shall be applied globally to all life annuities established for this purpose.

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