10853

(a) Appreciation before becoming a resident of Puerto Rico.— The total net long-term capital gain generated by a resident individual investor related to the appreciation of the securities owned by such resident individual investor before becoming a resident of Puerto Rico, which appreciation is recognized ten (10) years after he/she became a resident of Puerto Rico and before January 1st, 2036, shall be subject to a five percent (5%) tax, in lieu of any other tax imposed under the Code. If such appreciation is recognized at any other time, the net long-term capital gain with respect to said securities shall be subject to the payment of income taxes in accordance with the tax treatment provided by the Code. The amount of the net long-term capital gain shall be limited to the portion of the gain related to the appreciation of the securities while the resident individual investor resided outside of Puerto Rico.(b) Appreciation after becoming a resident of Puerto Rico.— The total net capital gain generated by a resident individual investor related to any appreciation of securities after said resident individual investor becomes a resident of Puerto Rico that is recognized before

capital gain generated by a resident individual investor related to any appreciation of securities after said resident individual investor becomes a resident of Puerto Rico that is recognized before January 1st, 2036, shall be fully exempt from income taxes in Puerto Rico, including the alternate basic tax provided in the Code. If such appreciation is recognized after December 31st, 2035, the net capital gain with respect to said securities shall be subject to income taxes in accordance with the tax treatment provided by the Code. The amount of this net capital gain means the portion of the gain related to the appreciation of both the securities owned by the resident individual investor at the time of becoming a resident of Puerto Rico and those acquired by him/her after becoming a resident of Puerto Rico. History —Jan. 17, 2012, No. 22, § 4, renumbered as § 5 and amended on July 11, 2012, No. 138, §§ 2, 3.