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Analysis of Royal Decree-Law 1/2017, of Urgent Measures of Consumer Protection in Terms of Soil Clauses

Last Saturday, January 21, the Royal Decree-Law 1/2017, of January 20, was published in the BOE of urgent measures of consumer protection in terms of land clauses, which regulates the extrajudicial channel to solve The claims of the consumers derived from the last judicial judgments and the tax consequences of the same.

Its main characteristics are:

  • The extrajudicial procedure regulated in this Royal Decree-law is mandatory for financial institutions and voluntary for affected consumers.
  • It applies to loan or credit agreements secured by real estate mortgages that include a floor clause whose borrower is a consumer.
  • Its object is the repayment of amounts wrongly paid by the consumer to credit institutions under certain land clauses contained in loan or credit agreements secured by real estate mortgages.
  • The deadline for credit institutions to implement the pre-judicial claim system is one month from the entry into force of the rule. To do this, they must prepare specialized departments or services to resolve the claims.
  • Credit institutions should inform all those affected about the existence of this claim, as well as the possible tax consequences of the refund, but not individually, with sufficient communication through the web or generic information in their branches.
  • The entities will also communicate to the AEAT the information on the agreed returns. This is important because of the fiscal effects that can occur and that we will analyze later.
  • The process will be initiated by submitting the claim to the financial institution, which should send the consumer the calculation of the amount to be returned, including interest, or alternatively, the reasons why it considers that the claim is not appropriate. After receiving the communication, the consumer must state whether he agrees with the calculation and, if it is, the entity will make the return. The whole process will be done in a maximum term of three months.
  • Although in general the refund will be made in cash, the Royal Decree-Law contemplates the possibility that the parties, by mutual agreement, agree different compensatory measures. Therefore, once the amount to be refunded has been agreed upon, the credit institution must provide an assessment to determine the effect of the compensatory measure and grant a period of fifteen days for compliance to be shown. Acceptance of the compensatory measure informed with this extension must be made in writing and in a separate document that also shows that the three-month deadline has been met.
  • The extrajudicial claim procedure will be free. The formalization of the public deed and the registration that may be derived from the agreement between the financial institution and the consumer will accrue exclusively the notarial and registration fees corresponding, respectively, to a document without amount and a minimum registration , Whatever the basis.
  • The out-of-court procedure described is not incompatible with the judicial procedure, since the consumer may choose to go to the latter directly or, if no agreement is reached. However, once the preliminary claim procedure has been initiated, neither of the parties may exercise judicial or extrajudicial action for the same purpose. If this happens, the process would be suspended until the previous claim is resolved.
  • In relation to judicial proceedings that were already initiated upon the entry into force of the rule, the parties may agree to suspend this procedure and submit it to the extrajudicial procedure.

Tax treatment of the amounts received by the return of the floor clauses

The first final provision of the aforementioned Royal Decree-Law modifies Law 35/2006, on the Income Tax of Individuals, introducing, with effect from its entry into force and previous exercises not prescribed, additional Provision forty-fifth, In which it regulates the fiscal treatment of the amounts received by the return of the soil clauses in the following terms:

  • The following amounts are not included in the taxable income of the Individuals:
    • The amounts returned resulting from the agreements entered into with the financial institution (whether in cash or other form of compensation) as interest overpaid for the application of the floor clause.
    • Compensatory interest that, if applicable, could be met by the financial institution.
  • If the amounts returned were part of the basis of the deduction for investment in habitual residence (or deductions established by the Autonomous Community) from previous years, the right to deduct in relation to them will be forfeited. To regularize. This regularization will be carried out adding to the state and autonomous liquid quota accrued in the year in which the agreement with the financial institution was concluded, exclusively the amounts unduly deducted in the years for which the Administration's right had not been prescribed To determine the tax debt, in the terms set forth in Article 59 of the Personal Income Tax Regulation.

However, it is surprisingly not appropriate to regularize the part of the amounts that is directly allocated by the financial institution to reduce the principal of the loan.

  • If the amounts returned were considered expenses deductible in prior years in respect of which the Administration's right to determine the tax debt had not been prescribed, such consideration would be lost and regularized; In contrast to the previous case, it will be carried out here by means of the presentation of a supplementary self-assessment corresponding to said years. The complementary self-assessment must be filed within the period between the date of the agreement and the end of the next period of presentation of self-assessment and will not entail the application of penalty, interest for delay or any surcharge.
  • Finally, if the amounts returned were paid by the taxpayer in financial years for which the self-assessment period had not yet expired prior to the repayment agreement concluded with the financial institution, they can not form part of the investment deduction base In usual housing. Likewise, they can not be considered as deductible expenses for the calculation of the net return on real estate capital or activity.

All the previous tax regime, will also apply to the refunds derived from the execution of judicial judgments or arbitration awards.

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One of the things Mr. Balcells like most about his job is when you get a safe, legal and fair tax situation for the sake of the taxpayer's tranquility and economy, both in previous structuring and planning, and when certain criteria have to be defended before Tax administration.

As a lawyer, he always try to put himself in the place of the one who asks for advice, so that all the options or alternatives that are considered as solutions, are those that would adopt at a personal level if the interested party is himself.