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I've read that only a percentage of income from a Purchased Annuity is taxed in Spain. For example, if you purchased the annuity at age 65, only 24% is taxable, at age 66, 20%. Can anyone verify this? Many thanks.
Yes, it depends on age. Under 40 then 40% of the annuity is taxed leaving 60% tax free. If aged over 70 then only 8% of the annuity is taxed leaving 92% tax free.
For a life annuity the rates are
Posted: Sun Jun 4, 2023 7:24pm
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marcliff wrote on Sun Jun 4, 2023 7:02pm:
Yes, it depends on age. Under 40 then 40% of the annuity is taxed leaving 60% tax free. If aged over 70 then only 8% of the annuity is taxed leaving 92% tax free.
For a life annuity the rates are
Read more...
Up to age 40 years 40% is taxableAge 40 – 49 years = 35%Age 50 – 59 years = 28%Age 60 – 65 years = 24%Age 66 – 69 years = 20 %70 years plus = 8%
Wow, that was quick! Thank you very much for your reply.
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marcliff wrote on Sun Jun 4, 2023 7:02pm:
Yes, it depends on age. Under 40 then 40% of the annuity is taxed leaving 60% tax free. If aged over 70 then only 8% of the annuity is taxed leaving 92% tax free.
For a life annuity the rates are
Read more...
Up to age 40 years 40% is taxableAge 40 – 49 years = 35%Age 50 – 59 years = 28%Age 60 – 65 years = 24%Age 66 – 69 years = 20 %70 years plus = 8%
Just to be clear "depends on age" means when the annuity was taken out not your age now plus the rates quoted are the percentages which are subject to tax not the rates at which tax is applied.
It can be argued that UK annuities are not in fact the same as Spanish ones and should not benefit from Spanish tax breaks but that's a topic all of it's own!
Er, yes, the OP did say "If you purchased the annuity at age........" Sorry if that wasn't clear.
Posted: Mon Jun 5, 2023 4:36pm
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Darro wrote on Mon Jun 5, 2023 9:47am:
Just to be clear "depends on age" means when the annuity was taken out not your age now plus the rates quoted are the percentages which are subject to tax not the rates at which tax is applied.
It can be argued that UK annuities are not in fact the same as Spanish ones and should not benefit from Spanish tax breaks but that's a topic all of it's own!...
Read more...
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That's a very interesting point. I have now read on several websites (Lifestylegroup, Spenceclark) the figures that marcliff kindly supplied, but neither of them specifically mention whether they apply to a UK or Spanish purchased annuity. I assumed because they are directed mainly at expats that they meant UK. Do you know whether or not UK purchased annuities benefit from the tax-break?
