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Practical manual for Income Tax 2020.

3.3. Application of the corresponding reduction or drawdown coefficients

Once the amount of the reducible capital gain has been determined, the corresponding reduction or abatement coefficients are applied, depending on the nature of the capital asset from which the capital gain is derived, and the applicable reduction is determined.

To this end, it is necessary to distinguish between:

  • Shares admitted to trading on any of the official secondary securities markets defined in Directive 2004/39/EC of the European Parliament and of the Council of 21 April 2004 on markets in financial instruments and representing equity participation in companies or entities, with the exception of shares representing the share capital of Real Estate and Mutual Fund Companies: the applicable reduction is 25% for each year of permanence exceeding two from its acquisition until December 31, 1996 .

    Directive 2004/39/EC has been repealed with effect from 3 January 2017 by Directive 2014/65/ EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments. This, in its article 94, provides that references to Directive 2004/39/EC will be understood as references to Directive 2014/65/ EU.

  • Real estate , rights thereon or securities of the entities included in article 314 of the consolidated text of the Securities Market Law, approved by Royal Legislative Decree 4/2015, of October 23 (BOE of the 24th, with the exception of the shares or participations representing the share capital or assets of Real Estate Investment Companies or Funds: The applicable reduction is 11.11 percent for each year of permanence exceeding two from the date of acquisition until December 31, 1996.

    Please note that, although the ninth transitional provision of the Income Tax Law refers to article 108 of Law 24/1988, of July 28, on the Securities Market, said article together with the rest of the provisions of the aforementioned law (currently repealed), have been incorporated into the consolidated text of the Securities Market Law, approved by Royal Legislative Decree 4/2015, of October 23.

  • For the rest of the assets and rights , the applicable reduction is 14.28 percent for each year of permanence that exceeds two from its acquisition until December 31, 1996 . This group of assets and rights includes, among others, shares or interests representing the share capital or assets of Investment, Real Estate and Investment Companies or Funds.

The following table shows the reduction percentages applicable to the reducible capital gain based on the nature of the asset that generates it and the period of time that the asset remains in the taxpayer's assets as of December 31, 1996.

Years until 31-12-1996

Date of acquisition

Nature of the transferred asset

Securities admitted to trading

Real estate

Other items

Up to 2 12-31-1994 to 12-31-1996 0.00 % 0.00 % 0.00 %
Until 3 12-31-1993 to 12-30-1994 25.00 % 11.11 % 14.28 %
Up to 4 12-31-1992 to 12-30-1993 50.00 % 22.22 % 28.56 %
Up to 5 12-31-1991 to 12-30-1992 75.00 % 33.33 % 42.84 %
Up to 6 12-31-1990 to 12-30-1991 100.00 % 44.44 % 57.12 %
Up to 7 12-31-1989 to 12-30-1990 100.00 % 55.55 % 71.40 %
Up to 8 12-31-1988 to 12-30-1989 100.00 % 66.66 % 85.68 %
Up to 9 12-31-1987 to 12-30-1988 100.00 % 77.77 % 100.00 %
Up to 10 12-31-1986 to 12-30-1987 100.00 % 88.88 % 100.00 %
Up to 11 12-31-1985 to 12-30-1986 100.00 % 100.00 % 100.00 %

Remember: The related reduction percentages do not apply in any case to capital losses or to the part of the capital gain generated from January 20, 2006 until the date of the transfer.

According to the above, the part of the capital gains from assets or rights acquired before December 31, 1996 with an advance notice greater than is not subject to IRPF :

  • 5 years, in the case of shares admitted to trading on official secondary markets. That is, those acquired before December 31, 1991.
  • 10 years, if it involves real estate and rights thereto . That is, those acquired before December 31, 1986.
  • 8 years, for the rest of the assets and rights . That is, those acquired before December 31, 1988.

Provided that the transfer value of all assets to which this regime would have been applied, transferred from 1 January 2015 until the date of transfer of the asset, does not exceed 400,000 euros.