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Ana Anc And Ane Ang Ani Ann Ans Ant Any

Annuity taxation

The taxation of annuity and pension payments. The annuitant is taxed on only that part of his or her annuity which is regarded as interest. The balance, a return of capital, is taxfree. Retirement annuities (pensions) are taxed as earned income, but part of the benefits can be commuted to a tax free lump sum, often used to purchase an immediate life annuity a part of which is a return of capital and therefore tax free.

Annuity units

Ownership shares in a variable annuity’s separate account fund after the accumulation period ends. Annuity units are purchased with accumulation units and are used to establish benefit payment amounts. See also accumulation units.