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Practical Income Manual 2021.

Transitory rules: applicable reductions on benefits received in the form of capital derived from private social security systems

Benefits Reductions Time limits
Group insurance contracts that implement company pension commitments

Benefits received in the form of capital derived from contingencies that occurred after January 1, 2013 of insurance contracted before January 20, 2006.

This tax reduction regime applies to benefits received in the form of capital in the same tax period and will only be applicable to the part of the benefit corresponding to premiums paid until December 31, 2006 , as well as the ordinary premiums provided for in the original policy paid after this date.

Business contributions not imputed to workers

The reduction is applied to the benefit received.

Reduction 40 per 100 in the following assumptions:

Disability benefits.

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

    The transitional regime will apply, where applicable, 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.

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.

Business contributions attributed to workers

The reduction applies to:

(+) Perceived benefit

(–) Business contributions attributed to the worker

(–) Contributions, if applicable, made by the worker himself

Reduction 75 per 100 in the following assumptions:

  • Returns corresponding to premiums more than five years in advance.
  • Absolute permanent disability or severe disability benefits.

Reduction 40 per 100 in the following assumptions:

  • Returns corresponding to premiums more than two years in advance.
  • Remaining disability benefits.
Pension plans, social security mutual societies and insured pension plans

Benefits received in the form of capital derived from contingencies that occurred after January 1, 2013.

The reduction may only be granted to amounts received in the form of capital in the same tax period for the part corresponding to contributions made until December 31, 2006.

The reduction refers to all pension plans and insured pension plans subscribed by the same participant and with respect to the same contingency.

In the event of receiving benefits derived from a pension plan and a social security mutual fund in the form of capital for the same contingency, the application of the reduction will refer to the benefit of the pension plan and that of the social security mutual fund. in an independent way.

Reduction 40 per 100 when the following circumstances occur:

  • When more than two years have passed since the first contribution.
  • When they correspond to disability benefits, regardless of the period of time that has elapsed since the first contribution.
  • Benefits derived from contingencies that occurred after January 1, 2015.

    The transitional regime will apply, where applicable, 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.

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.

50% reduction for:

Benefits received in the form of capital by people with disabilities from social security systems established in their favor, provided that more than two years have passed since the first contribution.