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As pensioners do we become tax residents or not?

Posted: Sun Feb 27, 2022 2:26pm
5 replies383 views6 members subscribed
DuchessV

Posts: 6

Location: Mojacar

Joined: 29 Nov 2021

Not sure whether to become a tax resident or not. Can anyone tell me how complicated it is. We receive state pension, a private pension and draw down amount. Anyone with experience would be appreciated before we make any decisions. I realise we have to pay Spanish tax but trying to keep it to a minimum. Thanks. Vanessa

Paul 1670

Posted: Sun Feb 27, 2022 4:10pm

Posts: 33

26 helpful points

Location: Los Gallardos

Joined: 29 Dec 2021

Posted: Sun Feb 27, 2022 4:10pm

Hi 

If you are resident in Spain then you will have to pay tax on all your income.

Assuming you pay tax in the UK then you will need to complete the double taxation form to exempt you from UK tax.

Being resident in Spain for over 6 months of the year means you pay your tax here in Spain.

Obviously I do not know your full details but above is the norm, the tax year for Spain is Jan to Dec 

DuchessV

Posted: Sun Feb 27, 2022 8:21pm

DuchessV

Original Poster

Posts: 6

Location: Mojacar

Joined: 29 Nov 2021

Posted: Sun Feb 27, 2022 8:21pm

Paul 1670 wrote on Sun Feb 27, 2022 4:10pm:

Hi 

If you are resident in Spain then you will have to pay tax on all your income.

Assuming you pay tax in the UK then you will need to complete the double taxation form to exempt you from UK tax.

Being resident in Spain for over 6 months of the year means you pay your tax here in Spain.

Obviously I do not know your full details but above is the norm, the tax year for Spain is Jan to Dec 

Thank you for this. I was thinking how complicated it all might be but obviously better to get a tax adviser. What would you say is the most reasonable healthcare package as I have a pacemaker and need check ups from time to time. Also you never know what is around the corner! Thanks.

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Seafarer

Posted: Sun Feb 27, 2022 8:44pm

Seafarer

Helpful member

Posts: 107

61 helpful points

Location: Partaloa

Joined: 31 Aug 2021

Posted: Sun Feb 27, 2022 8:44pm

https://www.icalculator.info/spain.html

The above is a link to a tax calculator. Use the advanced button in order to input your age. This can give you, if properly used, a good guide to the amount of calendar year tax you are liable for. Usually April/May is a good period to complete your tax return via an accountant. Up to €120 per annum for an uncomplicated return is normal.

ALL income must be declared to Hacienda/Tributaria, if you spend more than 180 days in Spain, and have a padron, residencia/TIE etc. In order to avoid HMRC double taxation at the very least you will need a fiscal residency certificate to present to UK tax authority. This may take many months to process. In Spain you have to declare any Govt/forces, eg blue light service pension even if taxed at source AFTER being Spanish tax resident. Not declaring this may attract a Hacienda fine until resolved. You will not pay double tax, but the income might put you into a separate income bracket. The entire process can be less stressful if using a tax advisor (capable of doing both UK/Spain documentation). Somebody like Indalo partners in Mojacar can do that, as can many other competent accountants in the area.

Juliet Diaz

Posted: Mon Feb 28, 2022 9:44am

Juliet Diaz

Helpful member

Posts: 243

304 helpful points

Location: Vera Playa

Joined: 23 Aug 2019

Posted: Mon Feb 28, 2022 9:44am

Hi. It's not your choice whether you are a tax resident or not. It depends entirely on how many days you spend in Spain in a calendar year. If you spend 183 days or more in Spain in a calendar year you are tax resident and must complete a tax return. This is whether you have residencia or not. If your income is low you may not have to pay any tax but you still need to file a return. You risk a fine if you don't. If you are spending 183 days in Spain I would recommend you speak to a tax specialist. Hope this clarifies.

Lyn77

Posted: Mon Feb 28, 2022 1:34pm

Lyn77

Helpful member

Posts: 607

367 helpful points

Location: Vera Playa

Joined: 25 Feb 2017

Posted: Mon Feb 28, 2022 1:34pm

Get advice from an Asesoria.  Torres is the one we use in Mojacar.  You pay tax on your oap if you are a permanent resident. If you have private pensions and they are classed as government occupational pensions i.e. police, local government etc and you pay  tax in UK you can be exempt from tax on the Spanish system based on the double tax treaty, but it has to be declared over here. Other private pensions must be declared over here too.  

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