Luxembourg Life Insurance advantages for Spanish Residents

  • Possibility of naming one or more irrevocable beneficiaries and free designation of other beneficiaries with a clause that can be amended at any time.

  • SOGELIFE’s policies are adapted to Spanish legislation:
    • Spanish regulations authorise investments in guaranteed-rate funds and External Funds only within the same policy
    • If the policyholder wishes to invest simultaneously in an External Fund, a Dedicated Internal Fund, and a Collective Internal Fund, he or she has the option of purchasing more than one policy.
  • Natural persons:
    • No income tax if no redemption is made during the life of the policy.2
    • If the policy is redeemed, taxation at a rate of 19%, 21%, 23% or 26% is applied.3
    • Contracts qualifying as redeemable are subject to  Spanish wealth tax. The redemption value as of 31 December is included in the tax base.
    • Marginal tax rates range from 0.2% to 2.3%, with rates varying by region and depending on the rebates applicable.
  • Legal entities:
    • Annual taxation at a rate of 25% of the difference between the net asset value of the assets associated with the policy at the beginning and end of the taxation period.
  • A way of passing on assets:
    • Freedom to transfer capital to selected beneficiaries.
    • Possibility for cross-border beneficiaries to benefit from double taxation treaties or agreements concluded between Spain and other countries with regards to inheritance tax.

2) Subject to compliance with the provisions of Article 14.2 h) of Law no. 35/2006 governing income tax for individuals.

(3) The policyholder will be subject to withholding tax by SOGELIFE at a rate of 19%. In the event that the policy is partially or totally surrendered, or expires, income will be declared and paid via the tax representative.