Impossibility of offsetting capital losses of the deceased in Personal Income Tax

Managing inheritances involves various tax implications that go beyond Inheritance Tax. One of the most recurring questions arises when the deceased leaves capital losses pending to be offset in their Personal Income Tax (IRPF) return. Recently, the Directorate General of Taxes (DGT) has clarified the impossibility of heirs using these negative balances for their own tax benefit.

What the DGT has ruled

The query analyzed whether an heir could offset in her IRPF return the capital losses that her brother, the deceased, did not manage to offset before passing away. The advisory body has ruled that this is not legally possible.

The criterion is based on the fact that capital losses correspond exclusively to the taxpayer who obtained them. According to current regulations, the object of the tax is the income of the taxpayer themselves. In this sense, gains or losses are considered to be obtained solely by those who are the owners of the assets at the time of their generation. Therefore, the status of an heir does not grant the right to use the loss balances of a different natural person.

What this means for you

If you are an heir to a natural person, you must understand that the tax personality of the deceased is extinguished upon death. The capital losses that the deceased had in their tax year are not transferred along with the inherited assets or rights. This directly affects natural persons who, after receiving an inheritance, attempt to reduce their tax burden in the IRPF by offsetting negative balances that do not belong to them.

What should be done

In a succession situation, it is necessary to perform a detailed analysis of the deceased's asset composition. It is fundamental to distinguish between assets that increase the value of the inheritance and loss balances that have no tax utility for the successor. It is recommended to assess each particular case to ensure that the heirs' tax returns strictly comply with the regulations, avoiding errors in the offsetting of taxable bases that could lead to inspections by the Administration.