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Practical Income Manual 2021.

Other requirements and conditions for the application of the exemption

A. Maximum reinvestment limit

The maximum total amount whose reinvestment in the creation of 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, the amount of 240,000 euros ##, only the amount will be considered reinvested of the difference between 240,000 euros and the amount of previous reinvestments.

B. Reinvestment term

The annuity must be established within a period of six months from the date of transmission of the asset element.

However, when the capital gain is subject to withholding and the transfer value reduced by the withholding amount is used entirely to constitute a life annuity within the aforementioned period of six months, the term to allocate the amount from withholding to the constitution of the 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 the disposal

When the reinvestment is not carried out in the same year as 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 the heading F2 of the declaration and the corresponding section of Annex C.2 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 ##1 .

E. Failure to comply with the conditions of the reinvestment or anticipation, total or partial, of the economic rights derived from the life annuity established

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

In such case, the taxpayer will allocate the non-exempt capital gain to the year of its obtaining, carrying out complementary self-assessment, including late payment interest, which will be presented in the period between the date on which the non-compliance occurs and the termination. of the regulatory declaration period corresponding to the tax period in which said non-compliance occurs.