You can apply for a capital annuity from the age of 55 to 85 years old.
You can arrange a capital annuity from €30,000.
The bank cannot give you an interest rate as these are published weekly and vary depending on the age range you are in.
The income is paid out annually at least, depending on your choice, and you start to receive it the year after it is arranged.
There are two types of guarantee for two different cases.
- During the life of the insured/investor: this product assures you a fixed and constant income throughout your life or until it is redeemed.
- In case of death: During the first two years that the product is contracted, 100% of the investment or premium paid will be received. From the third year, the limit will be 90%, 89% or 70% depending on the type of premium paid.
Although this product is designed to accompany you throughout your life, you can request the redemption of the premium/investment from the first year after it is arranged.
The redemption value will depend on the market value of the assets in your portfolio at that time, and the capital contracted in case of death. The amount you will receive depends on the performance of the financial markets. You may lose some of the principal of your investment, in addition to the interest.
As this is insurance, you can specify the beneficiaries. If you do not do this, the beneficiaries will be your legal heirs.
The benefits received are considered capital gains and are subject to a 19% withholding. The percentage personal income tax on annuities depends on the age of the investor or insured party when the policy is arranged:
- 40% of the payments aged under 40.
- 35% of the payments aged between 40 and 49,
- 28% of the payments aged between 50 and 59,
- 24% of the payments aged between 60 and 65,
- 20% of the payments aged between 66 and 69,
- 8% of the payments after the age of 70.
In the event of death, the payments received by the beneficiaries will be subject to Inheritance and Donations Tax.
If you are over 65 and the funds used for the investment or premium are from reinvestment of capital from sales of your assets (real estate, shares, investment funds, etc.) in the six months before arranging the Capital Annuity, you can benefit from a tax exemption of €240,000.