There are various ways to receive payment of the amounts saved in your pension plan, in the provisions. Your asset manager will advise you on which is the most beneficial to you for tax purposes. The ways of receiving payment are:

• Capital: The provision is received in an only charge.
• Financial incomes: You set the amount you wish to receive and the frequency of payment until all the accumulated capital has been paid out. In this way, you benefit from the interest that continues to be generated by the unconsumed capital in the pension fund. This formula can be adapted to your financial needs at any particular time, as it allows you to freely modify the amounts and the frequency of payment.
• Insured incomes: The amounts you receive are fixed and contracted with an insurance company, which guarantees payment of the income in the previously established period. The conditions of this income cannot subsequently be modified.
• Collections without regular frequency: The money is available in the form of payments without an established frequency.
• Mixed: A combined provision is received, partly in capital and partly in financial income. The combination of the way of receiving payment can be freely modified.

A pension plan can mean significant tax savings.

This saving is because the amount of the pension plan contributions is deducted from the general personal income tax assessment basis, as long as you obtain earned income from work or economic activities.

The limit of the annual contribution it is 8,000 euros and the tax reduction limit is set at the lesser of the following amounts: the amount paid in or 30% of net earnings from work and economic activities during the financial year. Additionally, if your spouse does not obtain net earnings from work or economic activities or earns less than 8,000 euros a year, you will be able to deduct from your general income tax assessment base the contributions to the pension plans of which your spouse is titleholder up to a maximum limit of 2,500 euros a year.

Once payments begin to be received from a pension plan, amounts received are considered as earned income for tax purposes and are subject to personal income tax. Given that the way of receiving payments is flexible, it is important that you take advice on that which is most beneficial for tax purposes.

In the case of the titleholder’s death from the pension plan, the beneficiaries will pay income tax on the amounts as if it were earned income. They are not subject to Inheritance and Gift Tax.

This information is in accordance with the current legislation and may be modified in the future.

Your asset manager will constantly advise you on how to optimise the tax benefits of your pension plan.