1. In general

Among the incomes not subject to IRPF the following can be mentioned:

• Income that is subject to the Inheritance and Gift Tax

Regulations: Art. 6.4 Law Income Tax

These incomes consist of capital gains that occur in the person who receives amounts, assets or rights through inheritance, legacy or donation or for being the beneficiary of life insurance contracts, when the contracting party is a person other than the beneficiary, except in cases where by express legal provision the amounts received from said insurance are considered income from work.

• Capital gains or losses revealed in the cases listed in article 33.3 of the Personal Income Tax Law .

Article 33.3 of the Income Tax Law establishes cases in which, by express legal provision, there is no capital gain or loss that are discussed in Chapter which we refer.

• Transitional regime applicable to capital gains derived from assets acquired prior to December 31, 1994 (reduction or reduction percentages)

Regulations: First Additional Provision of the Personal Income Tax Law

The part of the capital gain generated before January 20, 2006 (not the capital losses) derived from assets not affected by the development of economic activities that as of December 31, 1996 had been in the taxpayer's assets for a period of more than:

• 10 years, in the case of real estate or rights thereto.
• 5 years, in the case of shares admitted to trading, with the exception of shares representing the share capital of Real Estate and Mutual Fund Companies.
• 8 years, in the case of other assets or rights.

Since 1 January 2015, a maximum and overall limit of 400,000 euros has been established for all assets to which the above applies, which operates on the transfer value.

Detailed discussion of transitional regime is contained in Chapter .

• The capital losses that, by express provision contained in article 33.5 of the Personal Income Tax Law, are not computed as such.

The detailed list of these patrimonial losses that are not computed as such is contained in Chapter 11, to which we refer.

• Income from movable capital that arises from profitable transfers of financial assets due to the death of the taxpayer.

Regulations: Art. 25.6 Law Income Tax

It is necessary to point out that this assumption completes the one relating to the non-taxation of capital gains or losses produced by lucrative transfers due to the death of the taxpayer (capital gains of the deceased) included within those related in article 33.3 of the Law of Personal Income Tax . Consequently, income derived from the lucrative transfer of financial assets due to death will not be considered as income from personal capital for the deceased.

• The income that is revealed as a result of the exercise of the right to redeem collective insurance contracts that implement pension commitments. ##

Regulations: First Additional Provision of the Personal Income Tax Law

This income will not be subject to the personal income tax of the holder of the financial resources that correspond in each case, in the following cases:

• For the total or partial integration of the commitments established in the policy into another insurance contract that meets the requirements of the First Additional Provision of the consolidated text of the Law on the Regulation of Pension Plans and Funds.
• For the integration into another collective insurance contract of the rights that correspond to the worker according to the original contract in the event of termination of the employment relationship.

The income that arises as a result of the participation in the benefits of insurance contracts that implement pension commitments in accordance with the provisions of the First Additional Provision of the consolidated text of the Law on the Regulation of Pension Plans and Funds is also not subject to personal income tax, when said participation in benefits is used to increase the benefits insured in said contracts.

• Disposal of assets that make up personal assets to meet the economic needs of old age and dependency

Regulations: Fifteenth Additional Provision of the Personal Income Tax Law and the first Additional Provision of Law 41/2007, of December 7 ( BOE of the 8th).

The amounts received as a result of the provisions made of the habitual residence ( reverse mortgage ) by persons over 65 years of age, as well as by persons who are in a situation of severe or great dependency, as referred to in article 26 of Law 39/2006, of December 14, on the Promotion of Personal Autonomy and Care for Persons in Situations of Dependency ( BOE of the 15th), provided that they are carried out in accordance with the financial regulations relating to the acts of disposition of assets that make up the personal assets to assist the economic needs of old age and dependency.

Regarding the concept of habitual residence see the Twenty-third Additional Provision of the Personal Income Tax Law and article 41 bis of the Personal Income Tax Regulations .

Reverse mortgages are regulated by the First Additional Provision of Law 41/2007, of December 7, which modifies Law 2/1981, of March 25, on the Regulation of the Mortgage Market and other regulations of the mortgage and financial system, on the regulation of reverse mortgages and dependency insurance and which establishes certain tax regulations (BOE of 8). And according to this provision, "reverse mortgage" is understood to be a loan or credit guaranteed by a mortgage on real estate that constitutes the applicant's habitual residence, provided that they meet the following requirements:

1. that the applicant and the beneficiaries he/she may designate are persons aged 65 years or older or affected by dependency or persons who have been recognised as having a degree of disability equal to or greater than 33%,
2. that the debtor has access to the amount of the loan or credit through periodic or single provisions,
3. that the debt is only enforceable by the creditor and the guarantee enforceable when the borrower dies or, if so stipulated in the contract, when the last of the beneficiaries dies,
4. that the mortgaged property has been appraised and insured against damage in accordance with the terms and requirements established in articles 7 and 8 of Law 2/1981, of March 25, on the Regulation of the Mortgage Market.”

These mortgages may only be granted by credit institutions and insurance companies authorised to operate in Spain, without prejudice to the limits, requirements or conditions imposed on insurance companies by their sector regulations.

• Financial aid granted for uncovered illness expenses

Nor are those financial aid granted for illness expenses not covered by the corresponding Health Service or Mutual Fund , which are intended for treatment or restoration of health, considered taxable income.