People over 65 will not be taxed on capital gains from sales of assets

Some time ago the government announced it was working on a deep fiscal reform that will affect many tax matters in order to encourage the economic development and job creation.

The government on Friday approved the final text of the Fiscal Reform. A novelty compared to what we knew would contain that capital gains from the sale of assets, such real estate, shares, etc obtained by people over 65 will not be taxed. The necessary condition for exemption is that these benefits have to be invested in financial assets to supplement the state pension (annuities, private pensions,...). 

That is, if a self-employed person retires and transfers its business to another person then the profit obtained in the transaction will not be taxed if the money he collects is used to complete the social security pension that suits him. The same would happen if he holds shares in a company and sells or even the capital gains obtained for selling real estate assets will not be taxed.

We always talk about the capital gains on the sale and not the other taxes that may be associated with these operations (ITP / AJD, transfer tax or council taxes as plusvalia for example). This exemption applies only to income tax. 

The measure has been announced in anticipation of the approval by the Council of Ministers of the Fiscal Reform after the period of open consultation and could bring more news on the text and the original measures.

The final text also affects the controversial measure to tax the redundancy fees. After the initial announcement that was supposed to be exempt only those that correspond to 2,000 euros per year worked. Later it was rumored not to consider the dismissal cost as a deductible expense in the Corporation Tax, so shift the taxation from workers to the companies, and finally it seems the government has opted for a fixed ceiling of 180,000 Euros so the amount exceeding this figure will have to be taxed in the worker’s income tax.

Please note that the tax reform has not been approved and therefore the above measures cannot be implemented yet. We must therefore be aware of the final of the tax reform law because, there may be more important changes.