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V3224-23 12 December 2023 · SG de Impuestos Patrimoniales, Tasas y Precios Públicos Criterion in force
IS · renta vitalicia

Heirs must deduct the value of bequeathed life annuities from the estate for Inheritance Tax purposes

A query was raised regarding the valuation and taxation of a life annuity established in a will as an inheritance charge. The DGT ruled that heirs must deduct the value of such a charge from the total estate.

The question raised

How and at what time this monthly and life annuity amount must be taxed in the Inheritance Tax (or the corresponding tax), whether it must be deducted from the hereditary estate for the computation of the amounts corresponding to the heirs and, if so, how it would be calculated. As well as, whether it must be imputed to the legatee and, if so, likewise, how the amount on which they must be taxed would have to be calculated.

The DGT's ruling

Heirs must deduct from the Inheritance and Gift Tax return the value of the life annuity burden, calculated according to its real value at the time of the decedent's death. In the absence of specific regulations in the LISD, the valuation method provided in Article 10.2.f) of the TRLITPAJD may be applied. This method consists of capitalizing the pension at the Bank of Spain's basic interest rate and applying the valuation rules for usufructs according to the beneficiary's age.

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