8. Compensation or insured capital for losses or incidents in assets
Regulations: Art. 37.1.g) Law Personal Income Tax
Specific valuation standard
In the case of compensation or insured capital for losses or incidents in assets, the difference between:
-
The amount received as compensation , and
- The proportional part of the acquisition value that corresponds to the damage .
When the compensation is not in cash, the difference between the market value of the goods, rights or services received and the proportional part of the acquisition value that corresponds to the damage will be computed.
Capital gain will only be computed when there is an increase in the value of the taxpayer's assets. Consequently, in all those cases in which only the repair of damage is covered, no capital gain will be computed for tax purposes.
Example: Compensation or insured capital for losses or incidents in assets
Since 1990, Mr. SMG has been the owner of a villa acquired for an amount equivalent to 150,300 euros, including the expenses and taxes inherent to the acquisition paid by him.
On September 8, 2022, as a result of a fire in the chalet, it was completely destroyed, with the insurance company paying the amount of 89,800 euros. According to the specifications of the IBI receipt, the value of the land represents 40 percent of its total cadastral value.
Determine the amount of the capital gain or loss obtained.
Solution:
-
Compensation received: 89,800
-
Proportional part of the acquisition value that corresponds to the damage (1): 90,180
-
Asset loss (89,800 - 90,180) = -380
Note to example:
(1) The determination of the proportional part of the acquisition value that corresponds to the damage is determined by applying the percentage of 60 percent to the acquisition value of the villa (150,300 x 60%) = 90,180. (Back)