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Practical manual for Income Tax 2021.

7. Total or partial loss of the right to exemption for reinvestment in habitual residence and in new or recently created entities

Regulations: Art. 41.5 Regulation Income Tax

A supplementary self-assessment must be submitted when, after applying the exemption for reinvestment of capital gains derived from the transfer of the habitual residence or shares or interests in newly or recently created entities, the right to said exemptions has been lost, in whole or in part.

The loss of the right to the aforementioned exemption may occur as a result of:

  • The reinvestment has not been made within the legally established period.

  • Failure to comply with any other conditions that determine the right to the aforementioned tax benefit.

Precision: see in this regard, within Chapter 11, the conditions and requirements that determine both the exemption from the capital gain obtained from the transfer of the habitual residence of the taxpayer by reinvestment in another habitual residence of the amount obtained from the transfer of the previous one, as well as the exemption from the capital gain obtained from the transfer of shares or participations for which the deduction for investment in newly or recently created companies provided for in article 68.1 of the Personal Income Tax Law would have been applied, when the amount obtained from the aforementioned transfer is reinvested in the acquisition of shares or participations in another newly or recently created entity.

The supplementary self-assessment must be submitted within the period between the date on which the breach occurs and the end of the regulatory declaration period, corresponding to the tax period in which said breach occurs.

In this case, late payment interest is settled by the tax management bodies, after checking in each case that it has not been included by the taxpayer.

The settlement period will be calculated from the end of the deadline for filing the declaration for the year to which the supplementary declaration refers until the date of payment, provided that it has been made within the period provided for in the regulations indicated.

Note: If the supplementary declaration responds to this circumstance, the taxpayer must mark with an "X" the box [117] of the "Supplementary declaration" section of the declaration.