Account Based Pension

[RickO]

We are retired and living in Australia as Australian Citizens. We plan to relocate to Spain. One of our accounts is called a "Account-Based Pension". We are trying to define the type of account it would fall under the Spanish tax rule.

A brief description is as follow:
I opened a superannuation account at age 61 (when retired) and made a contribution into it. The contribution was all after-tax personnel money (No employer contribution, I was not employed in Australia). I then immediately converted it into a Account Based-Pension (formerly known as Allocated-Pension). This account allows various forms of investment vehicles. At 61 years of age, I received my first quarterly distribution. In Australia, such distributions, including earnings on the account, are free of tax after 60 years of age. (During the accumulation phase, the account is called superannuation and gets converted into a Account Based Pension during the distribution phase).

We suspect that an Account-Based Pension is not a pension (as defined in Europe and other countries in the world) despite its name. It seems to perfectly match a Europeen purchased deferred annuity until the part stating that the payments are to be made by a Insurance Company. The company that
holds our "Account Based Pension" is Colonial First State, a wealth management group, wholly owned by the Commonwealth Bank Group (which includes an Insurance company).

Any chance someone could help us define the type of account we have for Spanish tax purposes.

Thank you.

[El Cid]

It does sound like a "money purchase" annuity. As such it would qualify for special tax treatment.

Look at the tax FAQ here viewtopic.php?f=42&t=27576

Remember that the Spanish tax system in this instance is a self declaration system. You do not need to produce any evidence or details of any income, just the amount and declare it in whatever category that you think applies to it. Frankly, you could declare whatever you like in the hope that it will not be challenged. If it is subjected to an investigation, only then will you need to justify the details.

Sid

[RickO]

Thank you so much for your prompt and clear answer. Have a great day.