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Practical Income Manual 2021.

C 3. Temporary limits for the application of reductions of the transitional regime

Regulations: eleventh transitional provision.3 and twelfth transitional provision.4 Law Personal Income Tax

New: As of January 1, 2021, the transitional regime will not apply to benefits received as a result of contingencies that occurred in 2012 and previous years.

As of January 1, 2015 the possibility of applying the reductions of the transitional regimes discussed in sections 1 and 2 above (both of the derivative collective insurance contracts that implement pension commitments as well as those derived from pension plans, social security mutual societies and insured pension plans), is conditional on the benefits being received in the form of capital within a certain period whose completion depends on the year in which the contingency occurs. Thus:

  • Benefits derived from contingencies that occurred after January 1, 2015

    The transitional regime will apply, where appropriate, to the benefits received in the year in which the corresponding contingency occurs, or in the two following years.

  • Benefits derived from contingencies that occurred in 2013 and 2014

    The transitional regime may only be applicable, where applicable, to benefits received until the end of the eighth fiscal year following the one in which the corresponding contingency occurred.

Note: If the benefit in the form of capital is received after these deadlines have ended, the taxpayer will not be able to apply any reduction for this concept.