Plan your future...

paying fewer taxes.
 
Plan
your future

New Law of the I.R.P.F.
(Personal Income Tax)

Discover the new financial products
with the greatest tax advantages.
 
Introduction:

As a result of the new law of I.R.P.F., which went into effect on January 1st, the tax frame by which many financial products are regulated has changed. We invite you to know the new tax situation of the main savings means such as Investment funds, Retirement plans and Pensions Plans, so that you can get the maximum benefit from your savings.
 
Investment funds:

 
How do they pay?
The capital gains obtained by selling investment funds shares pay like personal wealth profit or loss. This is the difference between the shares buying price and the reimbursement.
 

Let us not forget that...
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For investments over two years, capital gains will not be counted together with the rest of your income, but will pay at a fixed interest of 20%.
 
When we get a refund, regardless of the investment period, capital gains will have 20% retention.
  
The reduction rate will be 14,28% for every accumulated year on 31/12/96. The first two years will not be taken into account.
 
Retirement Plans and Unit Linked:

 
How do they pay?
 
Retirement Plans profits pay as Property Capital Yield.
Considering investment period, the law establishes the following tax-free reduction rates:
 

For over two year operations
30% tax reduction

For over five year operations
60% tax reduction

For over eight year operations
70% tax reduction

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Let us not forget that...
 

Once the reductions have been made, the profits that have been obtained will have 25% tax retention.
 
Every accumulated year (excluding the first two) before  31/12/96 will still have a reduction rate of 14.28%.
 
For those operations of regular payments that have been produced for over a period of twelve years and that took place after 31/12/94, the profits reduction will be 70%.
 
Pension Plans:

 
How do they pay?
 
Deposits are immediately reduced from the taxable base, with the maximum corresponding to the lesser between 20% of the net earned income and 1.100.000 pts.

The benefit will be considered as earned income and it will have the normal retention depending on your personal situation.
 

Let us not forget that...
 

When the payment is made in money and our plan is at least two years old, there will be an exemption of 40%, i. e. we will only have to pay for 60% of the received amount.
 

TAX SAVING EXAMPLE
 

Effective net tax base
I.R.P.F. 1999

 5.000.000 8.000.000 12.000.000
Amount with no contribution 1.368.800 2.594.000 4.424.000
Contribution 500.000 750.000 1.100.000
Final amount 1.182.800 2.256.500 3.899.000
Tax saving 186.000 337.500 525.000
%   saving on
the contribution		 37,2% 45% 47,72%
 

ANNUAL HISTORIC YIELDS
 
Last 6 years: 11,80%
Last 3 years: 14,37%
Year 1998: 13,47%
 
Annuities and temporary Income:

 
How do they pay?
 
Immediate annuity yields have the tax consideration of Property Capital Yield. Tax reduction, which is based on the person's age, diminishes the part of the income that is considered profit. Let us see this in the following chart:
 
RECEIVER'S AGE % TAXABLE INCOME
Under 40 45 %
Between 40 and 49 40 %
Between 50 and 59 35 %
Between 60 and 69 25 %
Over 69 20 %
 
Let us not forget that...
 
There will be 25% retention on account on the taxable part.
 
Since these rates are better than those in the previous law, they affect all the contracts made before 1/01/1999.
 
The taxable percentage of temporary income goes from 15% for 1 to 5 years up to 42% for those over 15 years.
 
To sum up, if we take into account the taxpayer's income we can see the different types of tax for the financial products.
 
PERIOD ONE
YEAR		 BETWEEN TWO AND
FIVE YEARS		 MORE THAN
TWO YEARS		 BETWEEN FIVE
AND EIGHT YEARS		 MORE THAN
EIGHT YEARS
Marginal type
I.R.P.F.
 
Deposits
Insurance
Funds
Pension Plans		 Deposits
Insurance
(Retirement
Plans)
  		Funds          
 
 
  		Pension Plans
 
 
  		Insurance
(Retirement Plans)
 
  		Insurance
(Retirement Plans)
 
 
18.00 % 18.00 % 12.60 % 20.00 % 10.80 % 7.20 % 5.40 %
24.00 % 24.00 % 16.80 % 20.00 % 14.40 % 9.60 % 7.20 %
28.30 % 28.30 % 19.81 % 20.00 % 16.98 % 11.32 % 8.49 %
37.20 % 37.20 % 26.04 % 20.00 % 22.32 % 14.88 % 11.16 %
45.00 % 45.00 % 31.50 % 20.00 % 27.00 % 18.00 % 13.50 %
48.00 % 48.00 % 36.60 % 20.00 % 28.80 % 19.20 % 14.40 %
 

Commercial Union Life offers you its many
and new financial and insuring products
adapted to the present tax advantages.
 
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Email: euroteideseguros@euroteide-seguros.com
  dptocomercial@euroteide-seguros.com
© Euroteide Seguros S.L. 1998