Tips to pay less to the Treasury if you are 65 years of age or older

The end of the year is drawing near.

Thomas Osborne
Thomas Osborne
01 December 2022 Thursday 22:37
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Tips to pay less to the Treasury if you are 65 years of age or older

The end of the year is drawing near. For taxpayers there is less and less room for maneuver to try to reduce the tax bill to face in the next income campaign, when 2022 is settled.

In the list of tax tips and tricks to adjust taxation for the taxpayer, those over 65 have several specific advantages.

The most notable is that the sale of the home with capital gains is exempt from tax, but it must be the habitual residence, in which at least three years have been lived. If that home has been abandoned, it also enters the exempt assumptions that it has been exempt in the previous two years. Therefore, if you are close to this age and want to sell, as long as it is not urgent to obtain liquidity, perhaps it is better to wait until you reach 65 to do so.

In these cases, it must also be considered that if the owner is a married couple and one of the two is not 65 years old, the exemption will only be half. "If the house also belongs to your spouse and he has not reached that age, it may be convenient for you to wait until he meets it to formalize the transfer and not have to pay 50% of the capital gains," the Registry of Fiscal Advisory Economists (REAF-CGE).

"The logic when setting the exemption was that the sale could be to pay for a residence," they comment from TaxDown. “Despite being exempt from tax, it must be remembered that the income statement will have to be made, since with the sale there is an increase in assets. That is, we will put the data of the sale but we will not pay taxes ”, they point out from the tax platform.

If another patrimonial element is sold, neither is taxed on the gain if it is used to constitute a life annuity. This assumption has a maximum limit of 240,000 euros and the obligation to do so in the six months that have followed the disposal of the property. "In the event that you have not yet reached that age, assess whether you are interested in postponing the operation until the year in which you have it", they continue in the REAF-CGE.

Pension plans are another point to consider. If retirement approaches and redemption is considered, the benefits are taxed as work income and if it is redeemed in the form of capital, there is a 40% reduction in contributions prior to 2007. If it is redeemed as income, there is no deduction possible. For this reason, before the bailout, calculations must be made and avoid accumulating rents to avoid the progressivity of the rate.

Age must also be assessed in transmissions of family businesses. Donations will not be taxed in personal income tax once the owner has reached the age of 65, as long as he was directly dedicated to the business, they point out from the branch of tax advisors of the General Council of Economists.

One last note is that if money is lent to relatives, to demonstrate that interest is not charged and to eliminate the presumption of onerousness, you must go to a notary or present the property transfer tax model, from which you will be exempt, economists recommend .

On the other hand, we must also take into account the deductions that can be accessed once the income statement campaign starts, which can mean extra savings. In Aragon, those over 70 years of age have a deduction of up to 75 euros based on certain conditions; in the Canary Islands the amount for people over 65 years of age rises to 120 euros; in Castilla-La Mancha it is 150 euros for people over 75 years of age and in Extremadura there are deductions for widowhood.