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Practical Income Manual 2021.

1. Requirements for the application transitional system

The requirements that must be met for the application of the reduction or reduction percentages on the amount of capital gains are the following:

  1. That the capital gains come from transfers, onerous or lucrative, of goods or rights or from the extinction of rights.

    Therefore, the reduction percentages are not applicable to profits that arise as a result of additions of assets or rights to the taxpayer's assets that do not derive from a transfer, as is the case, for example, of prizes obtained. in contests or gambling winnings.

  2. That the asset or right has been acquired by the taxpayer before December 31, 1994 .

  3. That the good or right is not related to an economic activity .

    Notwithstanding the foregoing, if the asset element had been assigned to an economic activity, it must have been disaffected more than three years prior to the date of transfer.

  4. That the equity element has not been awarded to the partner in the dissolution and liquidation of transparent companies , in accordance with the provisions of the sixteenth transitional provision of the consolidated text of the Corporate Tax Law.

  5. That the transferred asset element does not come from contributions made to the protected assets of people with disabilities , in accordance with the provisions of the eighteenth Additional Provision of the Personal Income Tax Law .

  6. That the transfer value of all the assets to whose capital gain this transitional regime would have been applicable, transmitted from January 1, 2015 until the date of transmission of the asset element, has not exceeded 400,000 euros.