Regulations: Art. 25.3 a) 4 Law Personal Income Tax (first paragraph). See also art. 18 Regulation
When deferred, lifetime or temporary income is received, which has not been acquired by inheritance, legacy or any other succession title, the return on movable capital will be the result of applying to each annuity the corresponding percentage of those provided for immediate income, lifetime or temporary.
These percentages analyzed in the previous section (immediate, life or temporary income insurance) are the following:
1. Immediate annuities:
|Age of recipient||Applicable percentage|
|Less than 40 years||40 percent|
|Between 40 and 49 years||35 percent|
|Between 50 and 59 years||28 percent|
|Between 60 and 65 years||24 percent|
|Between 66 and 69 years||20 percent|
|70 or more years||8 per 100|
These percentages will be those corresponding to the age of the annuitant at the time of the constitution of the annuity and will remain constant throughout its validity.
2. Immediate temporary income:
|Rental duration||Applicable percentage|
|Less than or equal to 5 years||12 per 100|
|Greater than 5 and less than or equal to 10 years||16 per 100|
|Greater than 10 and less than or equal to 15 years||20 percent|
|Over 15 years||25 percent|
The result obtained will increase in the profitability obtained until the income is constituted, whose determination will be given by the difference between the current actuarial financial value of the income that is constituted and the amount of the satisfied premiums. Said profitability will be distributed linearly during the first 10 years of collection of said income if it is for life or between the years of duration of the same, with a maximum of 10 years, if the income is temporary (Art. 18 Regulation IRPF ). For its determination, the following formula can be used:
(VA - PS) ÷ No. years
- "VA" the current actuarial financial value of the income that is constituted.
- "PS" the amount of premiums paid.
- "No. years" the number of years of duration of the temporary income, with a maximum of 10 years. If the income is for life, 10 years will be taken as the divisor.
Exception: When the income has been acquired by donation or any other legal transaction free of charge and inter vivos , the return on movable capital will be, exclusively, the result of applying the percentage to each annuity that corresponds to those provided for immediate life or temporary annuities, since the constitution of the income was taxed in the Inheritance and Donation Tax.
The part of the income that is considered income from movable capital, by application of the corresponding percentage, will be subject to withholding on account.
Remember: Life or disability insurance that provides benefits in the form of capital and said capital is used to create life or temporary annuities, provided that this possibility of conversion is included in the insurance contract, will be taxed at the time of constitution of the annuities. according to what was commented in this number. In no case will this tax regime apply when the capital is made available to the taxpayer by any means.
Don GAM signed a deferred annuity life insurance contract on January 3, 2012, paying an annual premium of 6,000 euros payable on January 5 of each of the years 2012 to 2021, both inclusive.
On October 23, 2021, coinciding with his 68th birthday, he began collecting an annuity of 10,000 euros per year.
Determine the net return on movable capital knowing that, according to certification by the insurance company's actuary, the current actuarial financial value of the annuity to be collected amounts to 70,000 euros.
The net return on movable capital will be given by the sum of:
Applicable percentage on the annuity: 20 times 100s/10,000 = 2,000
Profitability until the constitution of income: (70,000 – 60,000) ÷ 10 (*) = 1,000
Return on movable capital: 2,000 + 1,000 = 3,000
Note to example:
(*) The profitability obtained up to the constitution of the income, difference between the current actuarial financial value of the income that is constituted (70,000 euros) and the amount of the premiums paid (6,000 x 10 = 60,000), is distributed linearly during the first ten years of income collection, so that from the eleventh year onwards, the return on movable capital will consist exclusively of 2,000 euros, since the applicable percentage depends on the age of the annuitant at the time of constitution of the income (68 years). remains constant throughout the duration of the rental. (Back)