Back to index
V5308-16 15 December 2016 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · patrimonio protegido

Funds may be used for a disabled person's vital needs without losing income tax relief

Consultants inquired about the required duration for maintaining contributions to protected assets to avoid losing tax relief, and whether the period applies to each individual contribution. The Directorate-General for Tax (DGT) clarified that the period is four years following the tax year of the contribution and that expenditure for vital needs does not constitute a disposal of assets.

The question raised

If the first contribution of €10,000 is made in the 2017 fiscal year, how much time must elapse to allow for disposals of said protected assets that do not result in the loss of the reduction in the IRPF tax base applied by the parents, by way of contributions to the protected assets of the disabled person, and specifically whether said period is four or five years. Furthermore, they question from when said period begins to count, whether from the date each contribution is made, or from the constitution of the protected assets.

The DGT's ruling

The period to avoid the regularization of reductions in the tax base is four years additional to the fiscal year of the contribution. However, the expenditure of money and the consumption of fungible goods to meet the vital needs of the beneficiary person are not considered acts of disposal. For real estate investments, there shall be no regularization if the new asset replaces the contributed money and is integrated into the protected assets. Notary fees for the constitution or contributions also do not mandate regularization if they are carried out under the legal administration regime.

Book your free first meeting