Reduction for returns with a generation period of more than two years or obtained in a notoriously irregular manner over time

Regulations: Articles 26.2 Law Personal Income Tax and 21 Regulations

Yields to which the reduction applies

When the income that is integrated into the general tax base has a generation period of more than two years, as well as when it is legally classified as obtained in a notoriously irregular manner over time, its net amount will be reduced by 30 by 100 , when, in both cases, they are allocated in a single tax period.

For these purposes, only the following are considered income from movable capital, obtained in a notoriously irregular manner over time, provided that, in addition, they are allocated in a single tax period:

1. Amounts obtained from the transfer or assignment of the lease contract.
2. Compensation received from the tenant or subtenant for damages or defects, in the case of leasing.
3. Amounts obtained from the constitution or transfer of rights of use or enjoyment for life.

Maximum amount of performance to which the reduction applies

The amount of net income to which the reduction will be applied may not exceed the amount of 300,000 euros per year .

In the event that several irregular returns of the same nature are obtained, and their amount exceeds the limit of 300,000 euros of the maximum amount on which to apply the 30% reduction, the maximum reduction will be distributed proportionally among all the returns of that nature.

Transitory rules: Income received in fractions before January 1, 2015

Regulations: Transitional provision twenty-fifth Law IRPF

Income from movable capital, with a generation period of more than two years, that was received in fractions prior to January 1, 2015, with the right to apply the reduction of article 26.2 of the Personal Income Tax Law in its wording in force on December 31, 2014, may continue to apply the reduction due to irregularity provided for in the aforementioned article, with the current reduction of 30 percent and the limit of the maximum reduction base of 300,000 euros, to each of the fractions that are charged from January 1, 2015, provided that the quotient resulting from dividing the number of years of generation, computed from date to date, by the number of tax periods of fractionation, is greater than two.

However, in the case of income derived from commitments acquired prior to January 1, 2015 that were scheduled to begin to be collected in fractions in tax periods beginning on that date, the replacement of the form of collection initially agreed upon for its collection in a single tax period will not alter the beginning of the yield generation period.

Remember: the returns obtained from the transfer to third parties of own capital that comes from entities linked to the taxpayer in the terms established in article 18 of the LIS that correspond to the excess of the amount of the own capital transferred to the related entity with respect to the result of multiplying the own funds by three, in the part that corresponds to the taxpayer's participation, of the latter, form part of the general tax base.