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British Pension - Tax Notification ?

British Pension - Tax Notification ?

Old Dec 22nd 2008, 12:57 am
  #16  
 
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Default Re: British Pension - Tax Notification ?

Originally Posted by Mitzyboy
Yes I understood that you had to declare your Government pension on your Spainsh return and then show it as a deduction "on the other side", at least if you were doing it legally!
Most "informed" opinion, such as Blevins and David Searle, does state that you do not declare these pensions at all and this does seem to be the generally accepted practice.

This may well be a "cop out" on behalf of Hacienda as it is too difficult to cope with it under the Spanish system. I can see no way of doing what you say on the Spanish tax declaration - there is no box available to enter such a deduction - or if there is I haven't found it yet! You just lump all your earned (or pension) income into one box.

All countries make provision for double taxation by allowing you to offset tax paid in one country from the tax due in the country of residence (with varying ways of calculating the offset) but what we are talking about here is a specific Double Taxation Treaty between the UK and Spain which clearly says that Crown pensions are ONLY taxed in the UK.

If you were to add the pension to your other income then it WOULD be taxed in Spain, even though you could offset the UK tax but this would be contrary to the agreement and definitely increase the amount of tax you would pay.

As I said, the easiest way of dealing with it is the "cop out" - ie ignore it.

It's pretty academic as, because the whole system is by self declaration, the only time you are likely to have to argue the point with the taxman is if you had a tax investigation in which case this would probably be the least of your worries!
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Old Dec 23rd 2008, 12:59 am
  #17  
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Default Re: British Pension - Tax Notification ?

I declare my UK work pension, and the tax deducted at source in the UK, The assesore here told me that paying tax here and not in the UK as I do not have property here, would make no difference so have continued to pay in the UK. Last years Spanish tax bill was 20 cents.
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Old Dec 23rd 2008, 2:19 am
  #18  
 
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Default Re: British Pension - Tax Notification ?

Originally Posted by mikelincs
I declare my UK work pension, and the tax deducted at source in the UK, The assesore here told me that paying tax here and not in the UK as I do not have property here, would make no difference so have continued to pay in the UK. Last years Spanish tax bill was 20 cents.

If you are a permanent resident (over 183 days in a calendar year) you should be paying tax in Spain, not in the UK - it's not optional. Owning property makes no difference to your tax status.

Tax in Spain is generally higher than in the UK.
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