Tax Optimisation
The FWU tariffs for unit-linked life and annuity assurance take into account the tax situation in each EU country in which these products are sold. As of 1 January 2005 ,the income tax treatment of life assurances in Germany has changed as follows:
For life assurances taken out after 1 January 2005 (new policies), the previously applicable tax exemption for capital returns no longer applies. For these new policies, half the difference in value between the insurance benefit and the sum of all contributions that were made towards it (contributions to unit-linked life assurances only, contributions to additonal insurances are not considered) is subject to taxation (s. 30 [1] No. 6 EStG) provided the following prerequisites are met:
- The insurance benefit is paid out after the taxpayer reaches the age of 60;
- The insurance benefit is paid out after a period of 12 years of concluding the policy.
Where these prerequisites are not met, the difference in value is fully taxable.
For life assurances taken out after 1 January 2005 - contrary to the past - it is no longer necessary for contributions to have been made for at least 5 years, and for the minimum death benefit to be 60% of the total contributions.
The tax liability arises on payment of the capital benefit at the end of the policy term in case of survival, or on payment of the redemption value in the event the policy is terminated. If the assurance benefit is paid in case of death, it remains tax exempt, as before. In Luxembourg itself, the seat of business of the ATLANTICLUX Lebensversicherung S.A., the insurance tariffs of FWU products are not subject to income tax, withholding tax or capital gains tax. Nor are policyholders or, if applicable, beneficiaries subject to any tax in Luxembourg, provided they reside outside Luxembourg and do not operate a business from there.
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