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Form 100. Personal Income Tax Return Declaration 2017

8.2.2.2. Transitional regime for profits derived from non-affected elements acquired before 31-12-94

  1. Earnings generated until January 19, 2006:

    Capital gains arising from the transfer of assets not affected by economic activities , acquired before December 31, 1994, will be subject to the reduction coefficients established in Law 18/1991, of June 6, on Personal Income Tax, provided that the value of all transfers made from January 1, 2016 with the right to the application of the percentages does not exceed the amount of 400,000 euros.

    For these purposes, assets not affected by economic activities will be considered those in which the de-affectation of these activities has occurred more than three years prior to the date of transfer.

  2. Earnings generated after January 19, 2006:

    The portion of the capital gain generated before January 20, 2006 will be distinguished from that generated after this date. For these purposes, the part of the capital gain generated before January 20, 2006 will be determined by the part of the gain that proportionally corresponds to the number of days elapsed between the date of acquisition and January 19, 2006, both inclusive, with respect to the total number of days that the item would have remained in the taxpayer's assets.

    The portion of the profit generated prior to January 20, 2006 will be reduced by applying the reduction coefficients established in the previous regulations. The portion of the profit generated from January 20, 2006 will not be subject to reduction.

    If during the year there were transfers to which the ninth transitional provision of the Personal Income Tax Law is applicable, the additional data requested in section G2 on page 9 of the declaration must be completed, indicating the transfer value of all assets to which this regime would have been applicable, transferred from January 1, 2015 until the date of transfer of the asset (not including the value of the latter).

SPECIAL REGIME: SECURITIES ADMITTED TO TRADING (Directive 2004/39/EC) AND SHARES OR PARTICIPATIONS IN IIC ACQUIRED BEFORE 31-12-94

The capital gain obtained will be reduced in one of the following two ways:

  1. If the transfer value is equal to or greater than that corresponding to the Wealth Tax for the year 2005.

    The portion of the capital gain generated prior to January 20, 2006 will be reduced by applying the reduction coefficients . For these purposes, the value of the transfer will be taken as that corresponding to the securities, shares or participations for the purposes of the Wealth Tax for the year 2005.

  2. If the transfer value is lower than that corresponding to the Wealth Tax for the year 2005.

    In this case, the entire capital gain generated will be reduced by applying the reduction coefficients .

CAPITAL GAINS DERIVED FROM ITEMS ACQUIRED BEFORE 12-31-94 (DT 9 Law)

Capital gains derived from the transfer of assets not affected by economic activities , acquired before December 31, 1994, will be subject to the reduction coefficients established in the previous tax regulations. (DT 8 ap. 2, rules 2 and 4 of Law 18/91) provided that the value of all transfers made from 1 January 2015 with the right to apply the percentages does not exceed the amount of 400,000 euros.

Once the portion of the capital gain generated prior to January 20, 2006 has been determined, its amount will be reduced, where applicable, as follows:

  1. The period of time that the asset remained in the taxpayer's assets prior to December 31, 1996 will be calculated. For these purposes, the period of permanence in the taxpayer's assets will be taken as the number of years rounded up, between the date of acquisition and December 31, 1996. According to this rule, one year and one day will constitute two years; Two years and one day will make three years, and so on.

  2. The transfer value of all assets to which this regime would have been applicable, transferred from 1 January 2015 until the date of transfer of the asset (not including the value of the latter), will be calculated in advance.

    If this value is greater than 400,000 euros, no reduction will be made to the profit derived from the transfer of the property, even if there is a reduction to the part of the capital gain generated before 20 January 2006.

  3. If the transfer value referred to in the previous section is less than 400,000 euros, this value and the transfer value of the asset will be added, differentiating between the following situations based on the result:

    1. That the sum is less than 400,000 euros

      In this case, the part of the capital gain generated before January 20, 2006 will be reduced by the amount resulting from applying the percentages indicated in number 4 below, for each year of permanence in the taxpayer's assets from its acquisition until December 31, 1996 that exceeds two.

    2. That the sum is greater than 400,000 euros

      In this case, the reduction will be applied to the part of the capital gain generated before January 20, 2006 that proportionally corresponds to the part of the transfer value of the asset that, added to the amount of point 2 above, does not exceed 400,000 euros.

The limit of 400,000 euros is individual. Therefore, each taxpayer is computed for the portion of the transfer value that corresponds to them for the elements transferred from January 1, 2015, depending on whether the ownership of the element is private or joint.

In order to determine whether or not the 400,000 euros are reached, the transfer values corresponding to the capital gains arising from the transfer of the following assets not affected by economic activities will not be taken into consideration:

  1. The transfer values corresponding to acquisitions made after December 30, 1994, since the abatement coefficients are not applicable.

  2. The transfer values corresponding to transfers that have given rise to a capital gain not subject to tax under the provisions of article 33 of the Personal Income Tax Law or that are exempt from it or in the case of partial exemption due to reinvestment, only the transfer value that was subject to reinvestment will be excluded.

  3. The transfer values corresponding to transfers of shares or interests listed on official markets acquired before December 31, 1994 when their acquisition value is higher than the value for the purposes of the 2005 Wealth Tax, given that in that case the abatement coefficients would not apply.

For these purposes, assets not affected by economic activities will be considered those in which the de-affectation of these activities has occurred more than three years prior to the date of transfer.

The portion of the profit generated prior to January 20, 2006 must be distinguished from that generated after this date.

  1. Profit generated until January 19, 2006.

    The application of the reduction coefficients is carried out as follows:

    1. The profit or loss for each item is determined according to the rules that apply in each case.

    2. If the result is a capital loss, it will not be subject to reduction.

    3. In the case of capital gains, the amount will be reduced as follows:

      1. The period of permanence in the assets of the taxpayer will be taken as the number of years between the date of acquisition of the item and December 31, 1996, rounded up.

        In the case of subscription rights, the duration period will be taken as that corresponding to the securities from which they originate.

        If improvements have been made to the transferred assets, the period of time that these remain in the assets of the taxpayer will be taken as the number of years between the date on which they were made and December 31, 1996, rounded up.

      2. If the transferred assets are real estate, rights thereto or securities of entities included in article 108 of Law 24/1988, of July 28, on the Securities Market, with the exception of shares or participations representing the share capital or assets of Real Estate Investment Companies or Funds, the capital gain will be reduced by 11.11% for each year of permanence that exceeds two.

        Capital gains derived from these elements will not be subject to tax if, as of December 31, 1996, they had a period of permanence of more than ten years (acquired before 12-31-86).

      3. If the transferred assets are shares admitted to trading on one of the official secondary securities markets as defined in Directive 2004/39/EC of the European Parliament and of the Council of 21 April 2004 on markets in financial instruments and representing equity participation in companies or entities, with the exception of shares representing the share capital of Investment Companies, the capital gain will be reduced by 25% for each year of permanence exceeding two.

        Capital gains derived from these elements will not be subject to tax if, as of December 31, 1996, they had a period of permanence of more than five years (acquired before 12-31-91).

      4. The remaining capital gains will be reduced by 14.28% for each year of permanence exceeding two.

        Capital gains derived from these elements will not be subject to tax if, as of December 31, 1996, they had a period of permanence of more than eight years (acquired before 12-31-88).

    4. If improvements have been made to the transferred assets, the portion of the sale value corresponding to each component thereof will be distinguished for the purposes of applying the provisions of the previous rules.

  2. Profit generated from January 20, 2006.

    The profit generated from January 20, 2006 will not be subject to reduction.