Individual systematic savings plans
They are set up as contracts concluded with insurance companies to establish an insured life annuity with the resources provided.
They will be instrumented through individual life insurance policies in which the contracting party, the insured party and the beneficiary are the taxpayer themselves.
The life annuity will be constituted with the economic rights derived from these life insurance policies. In life annuity contracts, certain benefit periods or benefit schemes can be established in the event of death once the life annuity has been set up. In order to ensure that the application of the exemption provided for in article 7.v) of the Personal Income Tax Act complies with the intended purpose , contracts concluded after 1 April 2019 in which reversal mechanisms are established, certain periods of provision or counterinsurance formulas in the event of death, compliance with a series of requirements (ninth Additional Provision of the Personal Income Tax Regulation)
In the event of total or partial advance payment of the economic rights derived from the life annuity established, the taxpayer must be included in the tax period in which the advance is due, the income that was exempt by applying the provisions of Article 7 (v) of this Act. In order to ensure that the application of the exemption provided for in article 7.v) of the Personal Income Tax Act complies with the intended purpose , contracts concluded after 1 April 2019 in which reversal mechanisms are established, certain periods of provision or counterinsurance formulas in the event of death, compliance with the following requirements (Additional Provision ninth Personal Income Tax Act)
Life insurance eligible for this contractual formula will not be group insurance policies that implement pension commitments in accordance with the first Additional Provision of the consolidated text of the Act on the Regulation of Pension Plans and Funds, or the social security instruments that reduce the tax base.
The terms of the contract will be expressly and prominently stated that it is a systematic individual savings plan and its initials are reserved for contracts that meet these requirements.
The first premium paid must be more than five years old at the time of the life annuity.
The annual maximum limit paid for premiums for this type of contract will be 8,000 euros, and will be independent of the limits of contributions from social security systems. Furthermore, the total amount of the premiums accumulated in these contracts may not exceed the total amount of 240,000 euros per taxpayer.
The life annuity received will be taxed as movable capital, applying the percentages of immediate life annuities.