Pension plans
Because now, more than ever, the economic situation demands that we be proactive in the future.
Start now to guarantee your future by taking advantage of the tax benefits that these products offer.
We have Insured Pension Plans (PPA) for pension transfers from 3,000 euros.
Find out here without obligation and start to guarantee your future.
Pension plans are currently one of the most common formulas for tax deductions in the income tax return. The Government’s policy to encourage savings allows contributions to pension plans to be subject to tax deductions. That means that we can deduct the input in the income tax return within the limits set by Law 35/2006.
The limits established by this law are as follows:
- Persons under 50 years of age may deduct the lesser of the following amounts: 10.000 euros (maximum contribution they can
make) or 30% of their income, understood as the sum of their net income from work and economic activities. - People over 50, who in theory should increase their contributions as retirement age approaches, may deduct the lesser of the following amounts: 12.500 euros or 50% of their income.
- People with disabilities can increase the deductions to a maximum of 24.500 euros and still enjoy tax benefits.
Also, those contributions made to the spouse’s pension plans are deductible as long as their income does not exceed 8,000 euros per year. The limit for reducing the taxable base is 2,000 euros.
In turn, contributions made to pension plans for people with disabilities over 65% are also deductible. But with established limits. Per family member maximum 10,000 euros and in no case can the total amount exceed 24,250 euros.
But how can these products be redeemed afterward?
All the benefits of the pension plans will be considered income from work for the tax return. Therefore, once you can and decide to redeem these products, you will have to declare them as if they were an entirely monetary income.
There are three ways to make refunds:
- In the form of capital, that is to say, in a single payment that includes the contributions plus the yields.
- In the form of income, which is the most common and involves receiving the amounts contributed to several regular payments.
- In a mixed form, with one part in the capital and the other in the form of income.
When can pension plans be redeemed?
To request the redemption of pension plans before retirement the following cases must happen serious illness or unemployment (previously it was due to prolonged unemployment of more than one year). Currently, to request the redemption of pension plans due to unemployment, you must meet these requirements:
- You must be in a legal situation of unemployment.
- You are not entitled to unemployment benefits at your contribution level or have exhausted such benefits.
- Be registered at the time of application as a jobseeker with the corresponding public employment service.
Self-employed workers who have ceased their activity may also redeem their pension plan if they meet the second and third requirements.
As we see here, as from the 2009 reform, unemployed persons will not have to wait for more than one year to receive unemployment benefits. They will be able to apply for it from the day after the three previous requirements are met, for which they will have to prove that these conditions have been met.
For further details, please consult Royal Decree 304/2004 of February, which approves the regulations on Pension Plans and Funds.
For further information, please contact us and we will advise you as best as possible.