Systematic Savings Plan, PIAS
Guaranteed return, full availability and tax advantages
BS Systematic Savings Plan or PIAS is a savings insurance policy which allows you to accumulate capital for your future and obtain major tax advantages.
Specially suitable for:
- Saving little by little to accumulate capital to supplement your retirement income.
Its chief advantages are:
- You have the certainty of a guaranteed return adapted to market evolution.
- Access to your money at any time.
- Enjoy favourable long-term tax treatment if you collect the capital in the form of an annuity.
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Characteristics
Amount: Maximum annual amount of 8,000 euros, and with a total maximum accumulated amount of 240,000 euros per insured person.
Contributions: This is a totally flexible product and you can start to build up your capital by making monthly contributions from just 50€, in addition to any extra contributions whenever you wish.
Plan Ahorro Sistemático, PIAS 10 years 20 years 30 years Contribution of 50€ monthly8.348 €23.674 €50. 845 €Contribution of 100€ monthly16.634 €47.273 €101.599 €Contribution of 150€ monthly24.921 €70.872 €152.352 €Note: supposing the inicial contribution is 50 euros, the interest rate 2% and 5% annual revalorization of the contributions.
Return: This plan guarantees an interest rate per calendar quarters or semesters which you will know in advance and which grows in accordance with the balance of your plan.Availability: You can access your money whenever you wish, from the first day, in part or in full and with no fee or expense for availability.
Additional Benefits: You get all the benefits of life insurance; the holder designates the beneficiaries who, in the event of the holder’s death, will receive the accumulated capital plus 10%.1
Tax treatment: The main advantage of the plan is that if you collect the accumulated saving in the form of a life annuity, you benefit from major tax advantages and therefore a higher income. And if you decide to access it, you will have deferred your tax payments.
1. With a maximum of 12.000 euros and 600 euros for holders aged over 65 or with aggravated risks.
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- Taxation
1. Residents
Personal income tax
The chief tax advantage of PIAS is the exemption of the return during the accumulation phase, i.e. from the establishment of the PIAS until the life annuity derived from the surrender of the premiums paid into the PIAS.
The application of said tax advantage is dependent upon the following requisites being met:
- Maximum annual contributions of 8,000€
- Total accumulated balance of the contributions, a maximum of 240,000€
- Minimum duration of the contract, 10 years until the time it is collected
- The benefit is collected in the form of a life annuity
During the accumulation phase, the return accumulates to the capital without any withholding and is only subject to taxation when drawn down.
If the surrender takes the form of a life annuity and the above conditions have been met, the return generated until such time will be exempt from taxation. Tax is only payable on the income received with the specific treatment of the income explained in the life annuity product.
The return on live-savings insurance received in the form of capital pay tax as equity investment income and form part of the Savings Tax Base The tax rate applicable to the Savings Tax Base is 21% for the first 6,000 euros and 21% as from 6,000.01 euros. A 21% withholding is applied when surrender occurs.In the event the aforementioned requisites are not met and a surrender is made before the ten year term from the establishment of the PIAS, the return generated will pay tax as a return on equity investment capital and will be included in the Savings Tax Base at the rate of 21% for the first 6,000 euros and at 21% as from 6,000.01 euros.
When performing a partial surrender, the amount recovered will be considered to correspond to the premiums first paid (FIFO system); therefore, those with the greatest accumulated life.
Inheritance tax
In the event of the holder’s death, his beneficiaries must pay Death duty and Gift tax for the amount received, with the particularity that being life insurance, if the relation of the beneficiary with the deceased holder is that of spouse, ascendant, descendant, person adopting or adopted, a 100% reduction will be applied with a limit of 9,195.49 euros (*)
(*) Variable amount dependent upon the Autonomous Community
2. Non-residents in Spain
In savings insurance, to accumulate capital, the interest is taxable only when redemption occurs.
According to the country of residence the tax percentage applied will be different:
- For citizens resident in countries where there is a double taxation treaty with Spain, that establishes the taxation rate at zero rate or a reduced rate, this zero or reduced rate will be applied when residence is accredited via a tax residence certificate issued by the tax authority of the country of tax residence. The tax residence certificate must be no older than one year on the date that the returns are obtained.
- For citizens resident in countries that do not have a double taxation treaty with Spain or who do not provide their fiscal residence certificate, tax will be applied at a rate of 24% on the entire yield obtained.