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V4769-16 8 November 2016 · SG de Tributación de las Operaciones Financieras Criterion in force
ISD · caudal hereditario

Income from a deceased person's social welfare benefits is subject to Inheritance and Gift Tax

The heirs of a deceased worker have enquired whether income received from company social welfare benefits should be taxed under Personal Income Tax (IRPF) or Inheritance and Gift Tax. The Directorate General for Taxes (DGT) has ruled that, as these funds form part of the estate, the amount is subject to Inheritance and Gift Tax rather than IRPF.

The question raised

Tax classification of the income obtained. In particular, whether taxation should be applied via Personal Income Tax or via Inheritance and Gift Tax.

The DGT's ruling

As it is an amount integrated into the deceased's estate, its acquisition is subject to Inheritance and Gift Tax by way of inheritance. Therefore, said income is not subject to Personal Income Tax. The beneficiaries must submit the corresponding self-assessment for the inheritance tax.

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