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Spanish taxes on UK pensions.

Posted: Wed Oct 13, 2021 4:49pm
36 replies941 views5 members subscribed
Andymac

Andymac

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Hi, not sure if, as full time residents, anyone has had to do this yet. I am trying to understand yet another requirement of the system, post brexit and this is regarding taxes to be paid on pension income from the UK in Spain.

I have read lots of items on various websites and in the UK the HMRC state that if you are registered for tax purposes in the UK then there is an agreement with most countries that you do not  pay twice. However I am being told (by my solicitor) that a tax form will need to be completed in Spain and I may be liable for tax, after an allowance, of between 24-48%. Although I will never be in the higher area, as the allowance is quite low, I am becoming very confused about the requirement to complete a tax return in Spain unless this is necessary, particularly after a conversation today when I was told the same thing had been advised and many forms completed but no tax payment was required but a hefty bill for someone to complete the forms.

Alicia 11

Posted: Wed Oct 13, 2021 6:37pm

Alicia 11

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Posted: Wed Oct 13, 2021 6:37pm

in Spain as a resident you are taxed on all your income worldwide unless it is a goverment paid pension from the UK i.e. civil servants,police,armed forces, teachers i believe as well.  However, if like my husband, that pension does not reach tax levels in the Uk it will be taxed here in Spain instead.  You should not be taxed on income that is taxed in the UK as there is a dual tax agreement but you may have to fill in forms to declare that you have paid tax and unless you are capable of doing that yourself then yes you will have to pay someone who is to do it for you.  This fee can vary vastly depending who you use.  we have always used Indalo Svces in Parque Commercial and find them very good and reasonable.

Andymac

Posted: Wed Oct 13, 2021 6:53pm

Andymac

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Posted: Wed Oct 13, 2021 6:53pm

Alicia 11 wrote on Wed Oct 13, 2021 6:37pm:

in Spain as a resident you are taxed on all your income worldwide unless it is a goverment paid pension from the UK i.e. civil servants,police,armed forces, teachers i believe as well.  However, if like my husband, that pension does not reach tax levels in the Uk it will be taxed here in Spa...

...in instead.  You should not be taxed on income that is taxed in the UK as there is a dual tax agreement but you may have to fill in forms to declare that you have paid tax and unless you are capable of doing that yourself then yes you will have to pay someone who is to do it for you.  This fee can vary vastly depending who you use.  we have always used Indalo Svces in Parque Commercial and find them very good and reasonable.

Hi and thank you, you have just about explained what my understanding of the situation is. I am liable for UK tax for this and next year so will need help. I will make a note of your contact.

Lyn77

Posted: Thu Oct 14, 2021 4:58pm

Lyn77

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Posted: Thu Oct 14, 2021 4:58pm

State pensions are taxable here in Spain if you are a permanent resident the lady who told you about double taxation treaty is quite right.  Any Government occupational pension is only taxable in UK but has to be declared in Spain to calculate your pension over here. We use Antonio Torres in Mojacar not far from Mercadona i believe.  His staff all speak good english as well.  We found them very helpful.

Andymac

Posted: Thu Oct 14, 2021 6:23pm

Andymac

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Posted: Thu Oct 14, 2021 6:23pm

Lyn77 wrote on Thu Oct 14, 2021 4:58pm:

State pensions are taxable here in Spain if you are a permanent resident the lady who told you about double taxation treaty is quite right.  Any Government occupational pension is only taxable in UK but has to be declared in Spain to calculate your pension over here. We use Antonio Torres in...

... Mojacar not far from Mercadona i believe.  His staff all speak good english as well.  We found them very helpful.

Thank you, all useful contacts.

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Brig13

Posted: Wed Oct 20, 2021 12:44pm

Posts: 88

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Posted: Wed Oct 20, 2021 12:44pm

Andymac wrote on Wed Oct 13, 2021 4:49pm:

Hi, not sure if, as full time residents, anyone has had to do this yet. I am trying to understand yet another requirement of the system, post brexit and this is regarding taxes to be paid on pension income from the UK in Spain.

I have read lots of items on various websites and in the UK the HMRC state that if you are registered for tax purposes in the UK then there is an agreement with most countries that you do not  pay twice. However I am being told (by my solicitor) that a tax form will need to be completed in S...

...pain and I may be liable for tax, after an allowance, of between 24-48%. Although I will never be in the higher area, as the allowance is quite low, I am becoming very confused about the requirement to complete a tax return in Spain unless this is necessary, particularly after a conversation today when I was told the same thing had been advised and many forms completed but no tax payment was required but a hefty bill for someone to complete the forms.

Hi I understand you only pay either in uk or spain. Not both .

Gordonalexanderspain

Posted: Wed Oct 20, 2021 2:44pm

Gordonalexanderspain

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Posted: Wed Oct 20, 2021 2:44pm

if you have Spanish residencia then you pay your tax in Spain, better to use an accountant the fee is minimal and stress free 

Alicia 11

Posted: Wed Oct 20, 2021 6:28pm

Alicia 11

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Posted: Wed Oct 20, 2021 6:28pm

Brig13 wrote on Wed Oct 20, 2021 12:44pm:

Hi I understand you only pay either in uk or spain. Not both .

yes but only on pensions taxed at source in the UK everything else is taxable in Spain as your worldwide income. so you pay tax in both countries but not on the same source.

Andymac

Posted: Wed Oct 20, 2021 6:53pm

Andymac

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Posts: 162

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Location: Lubrín

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Posted: Wed Oct 20, 2021 6:53pm

Alicia 11 wrote on Wed Oct 20, 2021 6:28pm:

yes but only on pensions taxed at source in the UK everything else is taxable in Spain as your worldwide income. so you pay tax in both countries but not on the same source.

Sorry but that does sound a little confusing.

I had my own business in the UK and I am liable for tax in the UK on my earning and pensions for 2020-2021 and part of 2021-2022. 

I cannot choose where I pay those taxes as they were earned in the UK and final payment is due on 31 January 2022 for 2020-2021 and 31 January 2023 for 2021-2022.

As I cannot be liable for tax in a country I did not earn that money in, surely I only pay it in the UK.

Gordonalexanderspain

Posted: Wed Oct 20, 2021 7:46pm

Gordonalexanderspain

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Joined: 18 Aug 2021

Posted: Wed Oct 20, 2021 7:46pm

Alicia 11 wrote on Wed Oct 20, 2021 6:28pm:

yes but only on pensions taxed at source in the UK everything else is taxable in Spain as your worldwide income. so you pay tax in both countries but not on the same source.

sorry all income from any where in the world is payable to the Spanish tax man if you are a Spanish resident 

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