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2021 Wealth Tax practical guide.

Rules

1. For the purposes of determining the amount of the taxable income for the savings of Personal Income Tax, the following rules must be applied:

  1. The portion of the aforementioned taxable base of savings corresponding to the positive balance of capital gains and losses will not be taken into account obtained by transfers of acquired assets or improvements made to them more than one year before the date of transfer, the amount of which will be entered in the box [32] of the Wealth Tax return.

    To determine this amount, the net balance of capital gains and losses obtained in the financial year resulting from the transfer of capital assets acquired more than one year before the date of the transfer must be calculated first.

    If the previous balance is negative or zero, zero will be entered in box [32].

    If the balance is positive, the net positive balance of the capital gains and losses attributable to 2021 to be included in the taxable income for savings (box [0424] of the Personal Income Tax return), and, where applicable, the compensation of the following balances.

    • Negative net balance of capital gains attributable to 2021 to be included in the savings tax base (with the limit of 25% of net positive balance of capital gains and losses attributable to 100). 2021 Box [0436]

    • Net negative balances of capital gains and losses of 2017, pending compensation at 1 January 2021, to be included in the savings tax base. Box [0439]

    • Net negative balances of capital gains and losses of 2018, pending compensation at 1 January 2021, to be included in the savings tax base. Box [0440]

    • Net negative balances of capital gains and losses of 2019, pending compensation at 1 January 2021, to be included in the savings tax base. Box [0441]

    • Net negative balances of capital gains and losses of 2020, pending compensation at 1 January 2021, to be included in the savings tax base. Box [0442]

    • Other net negative balances of 2017 capital gains, pending compensation at 1 January 2021, to be included in the savings tax base, with the limit of 25% of the net positive balance of the capital gains and losses attributable to 100. 2021 Box [0443]

    • Other net negative balances of 2018 capital gains, pending compensation at 1 January 2021, to be included in the savings tax base, with the limit of 25% of the net positive balance of the capital gains and losses attributable to 100. 2021 Box [0444]

    • Other net negative balances of 2019 capital gains, pending compensation at 1 January 2021, to be included in the savings tax base, with the limit of 25% of the net positive balance of the capital gains and losses attributable to 100. 2021 Box [0445]

    • Other net negative balances of 2020 capital gains, pending compensation at 1 January 2021, to be included in the savings tax base, with the limit of 25% of the net positive balance of the capital gains and losses attributable to 100. 2021 Box [0447]

    If the difference between the amount in the box [0424] and the amounts of the sum of the boxes [0436] and [0439] a [0445] and [0447] is equal to zero, in the box [32] of the Wealth Tax return, zero will be entered.

    If the difference between the amount in the box [0424] and the amounts of the sum of the boxes [0436] and [0439] a [0445] and [0447] is positive, and the balance of capital gains and losses derived from the transfer of assets acquired more than one year in advance at the date of transmission (Gyp > 1) it was equal to or greater than the amount stated in box [0424] of the Personal Income Tax declaration, in the box [32] of the Wealth Tax return, enter the difference between the amounts entered in the boxes [0424] and the amounts in the boxes [ 0436] and [0439] on [0445] and [0447] of the Personal Income Tax declaration.

    If the difference between the amounts in the box [0424] and the amounts of the sum of the boxes [0436] and [0439] a [0445] and [0447] is positive, and the balance of capital gains and losses derived from the transfer of assets acquired more than one year in advance at the date of the transfer (Gyp > 1), it was lower than the amount stated in box [0424] of the Personal Income Tax declaration, in the box [32] of the Wealth Tax return, will be entered the amount resulting from the following operation.

    (Gains and losses > 1 Casi÷ lla [0424]) x (Casillas [0424]-[ 0436] - [0439] - [0440] - [0441] - [0442] - [0443]-[0444]-[0445]-[0447])

  2. The amount of dividends and shares in profits obtained by equity companies, regardless of the entity that distributes the profits obtained by the aforementioned equity companies, will be added. 

    In accordance with the provisions of point (a) of paragraph 1 of the tenth transitional provision of Act 27/2014 of 27 November, on Corporation Tax (Official State Gazette of 28), dividends and shares in profits received by Personal Income Tax taxpayers; and obtained by equity companies are not included in the taxable income base of Personal Income Tax and are not subject to withholding or payment on account of this tax.

2. For the purposes of determining the total amount of Personal Income Tax savings, the following will not be taken into account: The part of this payment corresponding to the positive balance of those obtained by the transfer of acquired assets or improvements made to them with more than one year before the date of the transfer, the amount of which will be entered in box [35] of the Wealth Tax return, which is the result of the following operation:

Box [35] = (Fees corresponding to the net tax base of savings Casillas [0540]-[0541] Casilla savings tax base [0560]) x Casilla [32]

3. For the purposes of determining the full share of the Wealth Tax, the full share corresponding to equity elements that, due to their nature or destination, are not liable to generate income taxed under Personal Income Tax will not be taken into account.

For the purposes of determining the equity elements that are excluded in the calculation of the limit of the full payment referred to in Article 31.Uno.b) of the Wealth Tax Act, it must be "nature or destination" at the time of accrual of the Wealth Tax.

In this regard, clearly unproductive goods such as objects of art and antiques, jewellery, boats and cars for private use, unbuilt land, etc. are excluded.

However, apart from the clearly unproductive assets to which we have referred in the previous section, it should be noted that the destination assigned by the holder to a equity element may be decisive in its ability to generate returns. For these purposes, following the Supreme Court's judgment of 16 March 2011, appeal of cassation No. 212/2007 (Roj 1346 / 2011) which, in its FJ5, established that "of the literal meaning of this article it follows that the inclusion or exclusion derives from the nature or destination of the assets, at the time of settlement, regardless of whether they may be subject to transactions that accrue returns , "it is considered that, if the taxpayer's assets are held, at the time the accrual of Wealth Tax is not liable to produce income taxed under the Personal Income Tax Act, and will not be account within the calculation of the limit of article 31 of the Wealth Tax Act, regardless of whether they can be subject to or intended for transactions that yield returns at a later time.

However, the determination of the capital elements that can produce returns is a matter of fact, and therefore it must be determined by the Tax Management Administration, in view of the specific circumstances of the equity elements in each specific case.

The total amount of the tax payable on unproductive assets (CIBI) can be determined using the following formula:

Cibi = EPN x Gross Base Amount Taxable

The full amount corresponding to unproductive assets and the net value of the equity elements that cannot produce income in Personal Income Tax is the Tax Code. In other words, the value of such assets or rights reduced, if applicable, in the amount of the deductible debts corresponding to them and the proportional part of the debts that, being equally deductible, are not linked to any specific equity element.

If there is an excess of the limit of 60 per 100, this excess must be reduced in the share of Wealth Tax, without the reduction being greater than 80 per 100 of that payment. In other words, a minimum non-tax liability is established for the Wealth Tax equivalent to 20 per cent of the total tax liability. 100

Note: The limit of payments established in article 31,1 of Act 19/1991 is not applicable to non-residents who have chosen in accordance with the provisions of article 5.Uno.a) of Law 19/1991, of 6 June, on Wealth Tax (Official State Gazette of 7 June), due to the personal obligation to contribute to this tax, since not paying tax on Personal Income Tax, there is the possibility of adding the remaining full instalments to both taxes and placing them in relation to a percentage of the taxable base of Personal Income Tax .