Tax question
Mar 19th 2018, 8:39 pm
#1
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Posts: 34
Tax question
Evening all.
Can someone please confirm if my understanding below is correct? Thanks.
Moving to Spain in May ish. Will not be working, age 52. Any private pension income that I drawdown from the UK will be taxed in Spain. I believe the rate will be 19% on income above the personal allowance of €5,550 up to €12,450. Or am I talking nonsense?
Can someone please confirm if my understanding below is correct? Thanks.
Moving to Spain in May ish. Will not be working, age 52. Any private pension income that I drawdown from the UK will be taxed in Spain. I believe the rate will be 19% on income above the personal allowance of €5,550 up to €12,450. Or am I talking nonsense?
Mar 20th 2018, 8:42 am
#2
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Joined: Jan 2011
Location: Torrevieja Costa Blanca South
Posts: 390
Re: Tax question
You will also get a general tax allowance of 2,000€ and 3,700€ earnings related allowance (this reduces, on a sliding scale, the more you earn and disappears at earnings over 14,450).
A simple view is reduce your total income by 2,000€, multiply the balance by 19% to get the tax due, then reduce this amount by 19% of 5,550 (1,054.50) and 19% of 3,700 (703).
This is, of course assuming that your income comes within the bands allowed for this level of taxation.
A simple view is reduce your total income by 2,000€, multiply the balance by 19% to get the tax due, then reduce this amount by 19% of 5,550 (1,054.50) and 19% of 3,700 (703).
This is, of course assuming that your income comes within the bands allowed for this level of taxation.
Mar 20th 2018, 9:11 am
#3
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Joined: Oct 2017
Posts: 34
Re: Tax question
You will also get a general tax allowance of 2,000€ and 3,700€ earnings related allowance (this reduces, on a sliding scale, the more you earn and disappears at earnings over 14,450).
A simple view is reduce your total income by 2,000€, multiply the balance by 19% to get the tax due, then reduce this amount by 19% of 5,550 (1,054.50) and 19% of 3,700 (703).
This is, of course assuming that your income comes within the bands allowed for this level of taxation.
A simple view is reduce your total income by 2,000€, multiply the balance by 19% to get the tax due, then reduce this amount by 19% of 5,550 (1,054.50) and 19% of 3,700 (703).
This is, of course assuming that your income comes within the bands allowed for this level of taxation.
Mar 20th 2018, 9:55 am
#4
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Location: Costa Blanca
Posts: 3,143
Re: Tax question
The other issue is timing of arrival and entry into Spanish tax system - you need 183 days in Spain to be liable for tax so if you arrive (intending to live as a resident) after tax cut off point (Spains Tax year is Jan-Dec) you would not be liable to make a declaracion until 2020 on your 2019 income.
Mar 20th 2018, 10:29 am
#5
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Re: Tax question
The other issue is timing of arrival and entry into Spanish tax system - you need 183 days in Spain to be liable for tax so if you arrive (intending to live as a resident) after tax cut off point (Spains Tax year is Jan-Dec) you would not be liable to make a declaracion until 2020 on your 2019 income.
May 2nd 2018, 11:42 am
#6
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Re: Tax question
Can someone please help with this scenario?
Move to Spain end of July ie less than 183 days remaining in tax year.
Rent a flat and advise private pension provider of my new address.
Say in August or September I drawdown some pension income eg 20k.
Will I escape UK tax as I'm living in Spain? Will I escape Spanish tax as less than 183 days?
Or is this a wishful thinking tax avoidance idea?
Thanks.
Move to Spain end of July ie less than 183 days remaining in tax year.
Rent a flat and advise private pension provider of my new address.
Say in August or September I drawdown some pension income eg 20k.
Will I escape UK tax as I'm living in Spain? Will I escape Spanish tax as less than 183 days?
Or is this a wishful thinking tax avoidance idea?
Thanks.
May 2nd 2018, 6:37 pm
#7
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Joined: Aug 2009
Location: Costa Blanca
Posts: 3,143
Re: Tax question
Very wishful. You have to be tax resident somewhere at any point in time. In your example, you will be UK tax resident.
Sometimes there are benefits in being in one system as against the other (this is only an option when you are relocating) so take professional advice.
Sometimes there are benefits in being in one system as against the other (this is only an option when you are relocating) so take professional advice.
May 2nd 2018, 6:49 pm
#8
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Thread Starter
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Posts: 34
Re: Tax question
Very wishful. You have to be tax resident somewhere at any point in time. In your example, you will be UK tax resident.
Sometimes there are benefits in being in one system as against the other (this is only an option when you are relocating) so take professional advice.
Sometimes there are benefits in being in one system as against the other (this is only an option when you are relocating) so take professional advice.
May 2nd 2018, 9:18 pm
#9
Joined: Jun 2006
Location: Granada Costa
Posts: 10,899
Re: Tax question
Technically speaking, you cease to be tax resident in the UK when you leave permanently, but HMRC will continue to consider you tax resident until you can prove you are tax resident somewhere else. Once you can prove this, there is the possibility of a tax rebate.
Yes, if you take the lump sum while not tax resident in Spain, it will be free of Spanish tax.
Yes, if you take the lump sum while not tax resident in Spain, it will be free of Spanish tax.
