General rules

In general

When deferred capital is received, the return on the movable capital will be determined by the difference between the capital received and the amount of the premiums paid that have generated the capital received. This income is subject to withholding tax.

(Return = Capital received – ∑ Survival premiums)

In the case of partial redemptions, the amount redeemed will be deemed to correspond to the oldest premiums including their corresponding profitability.

In particular:

• In insurance that combines survival with death or disability

  In the case of an insurance contract that combines the contingency of survival with those of death or disability and the capital received corresponds to the contingency of survival, the part of the premiums paid that corresponds to the capital at risk due to death or disability that has been consumed up to that moment may also be deducted, provided that, throughout the term of the contract, the capital at risk is equal to or less than 5% of the mathematical provision. For these purposes, the difference between the capital insured for death or disability and the mathematical provision is considered to be risk capital.

  (Performance = Capital received – ∑ Survival premiums – ∑ Capital at risk premiums consumed ^(*)

  ^(*) with the limit of 5% of the mathematical provision

• In annual renewable insurance

  In the case of annual renewable insurance, only the amount of the premium for the current year will be taken into account, as this is what determines the amount of capital to be received.

  (Yield = Capital received – Premium of the year)

Determination of net income

Since the possibility of applying deductible expenses is not contemplated for this category of income, the total income coincides with the net income.