Lijfrente
Annuity
A life annuity is a periodic payment made throughout the lifetime of the annuitant, frequently provided in the form of a pension or insurance product.
An annuity is an agreement under which one party undertakes to make periodic payments to the other party for as long as the latter remains alive. This may arise either from an insurance contract or from a testamentary provision.
In Dutch law and the tax system, annuities are relevant on account of the strict conditions governing the deductibility of premiums for tax purposes and the taxability of benefits. They provide a means of securing income in later life and play a role in wealth planning.
In practice, an annuity is frequently concluded through an insurer or bank and must meet statutory requirements in order to qualify for tax advantages, such as the deferral of tax liability until payment is made.
“The notary advised the client to take out an annuity in order to supplement his pension income in a tax-efficient manner.”
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