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We blog legal and tax information targeted to resident and non resident UE citizens in Spain to help them with these issues and to solve doubt and generate controversy about these matters.

IRPF - TAXATION ON FINANCIAL PRODUCTS
31 December 2014 @ 12:41

2015 TAX REFORM

Exemption for the first € 1,500 of dividends

This exemption disappears.

Sales of preferential rights to acquire shares

These sales don't reduce the acquisition value of the shares they come from. Now they will be taxed on the sale period as capital gain. And in the moment of their transmission, the financial broker will have to make retention on account of the seller's income tax. This regulation will be enforced on 1 January 2017.

Capital gains excluded from taxation in cases of investment

People over 65 years old, besides the case of exemption when they sell their usual dwelling, now have a new case of exemption when they sell any kind of asset, if the product of the sale is invested within the following six months to set up a life annuity in their favour. The maximum amount that can be destined to this life annuity is €240,000.

When the total amount perceived for the sale is not totally invested, the capital gain will be taxed proportionally to the amount not invested. If the money invested in the life annuity is reimbursed in advance, the exemption is not applicable and therefore it would be necessary to pay the unpaid taxes.

Revenues coming from an insurance established in favor of the mortgage creditor

When there is a life insurance in favour of the bank over the loan guaranteed with a mortgage, to cover the permanent incapacity of the borrower, in case that incapacity happens and therefore the debt disappears, the borrower would be taxed for the disappearance of the debt as if he/she would have been the beneficiary of the insurance.

New exemption for the Long Term Savings Plans

There is a new financial product called Long Term Savings Plans. The positive revenues coming from these new plans implemented as life insurances, deposits or financial contracts, will be tax free if the tax payers do not dispose any amount from them in the term of five years from its setting up.

This Long Term Savings Plans will initiate with the payment of the first premium or the first placement and they will be call off with anticipated, even partially, reimbursement of the amounts placed before the five years term, or when the tax payers might make placements over €5,000 in one year.

Placements to these Long Term Savings Plans cannot be over €5,000 per year in any of the years of existence of the Plan. If any of these conditions is broken, then the Bank would charge tax retentions over all the revenues arisen from the beginning of the Plans as payment in advance of the tax that the tax payer will have to face for the loss of the exemption.



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