7. Temporary or life annuities

Regulations: Art. 17.Two Wealth Tax Law

We must distinguish:

• As a general rule , the valuation of temporary or life annuities established as a result of the delivery of capital, whether in money, movable or immovable property, the ownership of which corresponds to the declarant must be carried out by the result of capitalizing the annuity at the legal interest rate of money in force on the date of accrual of this tax (December 31) and taking from the resulting capital that part that, according to the rules established to value usufructs, corresponds to the age of the annuitant, if the annuity is for life, or to the duration of the annuity, if it is temporary.

  The rules for the valuation of usufructs can be consulted in the section " Real rights of use and enjoyment (excluding those that, where applicable, fall on the habitual residence of the taxpayer)", which is discussed in Chapter 3 of this Manual.

  For the year 2025, the legal interest rate has been set at 3.25 percent. 

  When the amount of the income is not quantified in monetary units, the valuation will be obtained by capitalizing the amount of 8,400 euros, the amount of the public indicator of income for multiple effects (IPREM) for the year 2025.

  Please note that the amount of the Public Indicator of Income for Multiple Effects (IPREM) for 2024 remained at 8,400 euros, in accordance with the provisions of the ninetieth Additional Provision of Law 31/2022, of December 23, on the General State Budget for the year 2023 (Official State Gazette of December 24), since they were extended for 2024 in accordance with the provisions of Article 134.4 of the Spanish Constitution. Likewise, they are extended to 2025, and said amount will apply.

  Similarly, with the extension of the General State Budgets for the year 2023, the legal interest rate for the year 2025, as in 2024, has been set at 3.25 percent.

• As an exception , when temporary or lifelong income is received from life insurance, these will be computed at the value established in the valuation rule provided for life insurance in the taxable base of the recipient. That is, they will be computed at their redemption value at the time of the tax accrual and, from July 11, 2021, in cases where the policyholder does not have the power to exercise the right of total redemption on the tax accrual date, by the value of the mathematical provision on the aforementioned date.