1. In general
Among the income not subject to IRPF the following can be mentioned:
• Income that is subject to Inheritance and Donation Tax
Regulations: Art. 6.4 Law Personal Income Tax
These incomes are constituted by the capital gains that occur in the person who receives amounts, assets or rights by inheritance, legacy or donation or by being beneficiaries of life insurance contracts, when the contracting party is a person other than the beneficiary, except in the cases in which, by express legal provision, the amounts received from said insurance are considered income from work.
• The capital gains or losses revealed in the cases related to article 33.3 of the Personal Income Tax Law
Article 33.3 of the Personal Income Tax Law establishes the cases in which, by express legal provision, there is no capital gain or loss that are discussed in the Chapter 11 to which we refer.
• Transitional regime applicable to capital gains derived from assets acquired prior to December 31, 1994 (reducing or abatement percentages)
Regulations: First Additional Provision of the Personal Income Tax Law
The part of the capital gain generated prior to January 20, 2006 (not capital losses) derived from capital elements not assigned to the development of economic activities that as of December 31, 1996 had a period of permanence in the taxpayer's assets greater than:
10 years, in the case of real estate or rights thereon.
5 years, in the case of shares admitted to trading, with the exception of shares representing the capital stock of Real Estate and Personal Investment Companies.
8 years, in the case of other assets or rights.
Since January 1, 2015, a maximum and joint limit of 400,000 euros has been established for all assets to which the above applies, which operates on the transfer value.
The detailed discussion of this transitional regime is contained in Chapter 11.
• Property losses that, by express provision contained in article 33.5 of the Personal Income Tax Law, are not computed as such
The detailed list of these capital losses that are not counted as such is contained in Chapter 11, to which we refer.
• The income from movable capital that is revealed on the occasion of lucrative transfers of financial assets due to the death of the taxpayer.
Regulations: Art. 25.6 Law Personal Income Tax
It is necessary to point out that this assumption completes the one relating to the non-subjection of capital gains or losses produced by lucrative transfers due to the death of the taxpayer (capital gains of the deceased) included within those listed in article 33.3 of the Law of Personal Income Tax . Consequently, those derived from the lucrative transfer of financial assets due to death will not be considered income from movable capital for the deceased.
• The income that becomes evident as a consequence of the exercise of the right of redemption of collective insurance contracts that implement pension commitments.
Regulations: Additional Provision First Personal Income Tax Law
Said income will not be subject to the personal income tax of the holder of the economic resources that corresponds in each case, in the following cases:
For the total or partial integration of the commitments implemented in the policy into another insurance contract that meets the requirements of the first Additional Provision of the consolidated text of the Law on the Regulation of Pension Plans and Funds.
For the integration into another collective insurance contract, of the rights that correspond to the worker according to the original contract in the case of termination of the employment relationship.
Nor is the income that arises as a consequence of the participation in benefits of insurance contracts that implement pension commitments subject to personal income tax in accordance with the provisions of the first Additional Provision of the consolidated text of the Law on the Regulation of Pension Plans and Funds, when said participation in profits is intended to increase the benefits insured in said contracts.
• Disposal of assets that make up personal assets to meet the economic needs of old age and dependency
Regulations: Fifteenth Additional Provision of the Personal Income Tax Law and the first Additional Provision of Law 41/2007, of December 7 ( BOE of the 8th).
The amounts received as a consequence of the dispositions made of the habitual residence ( reverse mortgage ) by people over 65 years of age, as well as by people who are in a situation of severe dependency or great dependency, referred to in article 26 of Law 39/2006, of December 14, on the Promotion of Personal Autonomy and Care for people in a situation of dependency ( BOE of 15), provided that they are carried out in accordance with the financial regulation relating to acts of disposal of assets that make up personal assets to assist the economic needs of old age and dependency.
Regarding the concept of habitual residence see the twenty-third Additional Provision of the Personal Income Tax Law and article 41 bis of the Regulations IRPF .
The reverse mortgage is regulated in the first Additional Provision of Law 41/2007, of December 7, which modifies Law 2/1981, of March 25, on the Regulation of the Mortgage Market and other regulations of the mortgage system and financial, regulating reverse mortgages and dependency insurance and establishing certain tax regulations (BOE of 8). And in accordance with said provision, "reverse mortgage" is understood to be the loan or credit guaranteed by mortgage on real estate that constitutes the applicant's habitual residence, provided that the following requirements are met:
that the applicant and the beneficiaries that he may designate are people aged 65 years or older or affected by dependency or people who have been recognized with a degree of disability equal to or greater than 33 percent,
that the debtor has the amount of the loan or credit through periodic or single provisions,
that the debt is only payable by the creditor and the guarantee enforceable when the borrower dies or, if so stipulated in the contract, when the last of the beneficiaries dies,
“that the mortgaged home has been appraised and insured against damage in accordance with the terms and requirements established in articles 7 and 8 of Law 2/1981, of March 25, on the Regulation of the Mortgage Market.”
These mortgages may only be granted by credit institutions and insurance entities authorized to operate in Spain, without prejudice to the limits, requirements or conditions that their sector regulations impose on insurance entities.
• Financial aid granted for uncovered illness expenses
Nor are those financial aid granted for illness expenses not covered by the corresponding Health or Mutual Service , which are intended for treatment or restoration of health, considered subject income.