Other requirements and conditions for applying the exemption

A. Maximum reinvestment limit

The maximum total amount whose reinvestment in the creation of life annuities will give the right to apply the exemption will be 240,000 euros .

If, as a result of the reinvestment of the amount of a transfer in a life annuity, taking into account previous reinvestments, the amount of 240,000 euros is exceeded, only the amount of the difference between 240,000 euros and the amount of previous reinvestments will be considered reinvested.

B. Reinvestment period

The life annuity must be established within six months from the date of transfer of the asset.

Covid-19: The declaration of a state of emergency due to the health crisis situation caused by Covid-19 halts the calculation of the aforementioned six-month period from March 14, 2020 (date of entry into force of Royal Decree 463/2020) until May 30, 2020.

However, when the capital gain is subject to withholding and the transfer value reduced by the amount of the withholding is entirely used to establish a life annuity within the aforementioned six-month period, the period for allocating the amount of the withholding to the establishment of the life annuity will be extended until the end of the year following the one in which the transfer is made.

C. Reinvestment in a year other than that of disposal

When the reinvestment is not carried out in the same year of the sale, the taxpayer will be obliged to state in the declaration for the year in which the capital gain is obtained his intention to reinvest under the conditions and deadlines indicated, completing for this purpose section F2 of the declaration and the corresponding section of Annex C.1 of additional information of the declaration model.

D. Partial reinvestment

When the reinvested amount is less than the total amount received in the transfer, only the proportional part of the capital gain obtained that corresponds to the reinvested amount will be excluded from taxation.

E. Non-compliance with the conditions of reinvestment or anticipation, in whole or in part, of the economic rights derived from the life annuity established

Failure to comply with any of the conditions established in this article, or the advance, in whole or in part, of the economic rights derived from the established life annuity, will determine the subjection to taxation of the corresponding capital gain.

In such case, the taxpayer will impute the non-exempt capital gain to the year in which it was obtained, by filing a supplementary self-assessment, including late payment interest, which will be submitted within the period between the date on which the breach occurs and the end of the regulatory declaration period corresponding to the tax period in which said breach occurs.