British tax allowance
 

Hello people,I'm struggling to remember how to use the forum-it's been a long time!I don't know if this subject has been discussed,it's about the possibility of George Osborne cancelling the british tax allowance for expats in EU.Surely to do this would be discriminatory and against the "spirit of Europe".I for one have a local government pension which can't be exported to Spain.What does the forum think? Excuse me if this is a current topic.

Re: British tax allowance
 

I can't help with your question but I've moved your thread to our Spain forum for you.

Re: British tax allowance
 

I´m not sure if this is what you want but I´ll post it anyway.

http://britishexpats.com/forum/spain...nsions-840045/

Re: British tax allowance
 

THe whole question of allowances for UK non residents is still under review.

It is almost certain that UK government pensions where tax is payable in the UK will retain the normal UK allowances.

However those pensions will have to be declared in Spain next year and although they will not be taxed directly, when included in the Spanish tax declaration it may result in an increase in the tax paid on the other income you receive such as the UK state pension etc.

Re: British tax allowance
 

Hi Normaneddy

I'm new to the forum so you're not alone with trying to figure how to post properly out!

Again, I'm not sure if this is what you're after as you don't mention which tax allowance but my solicitor told me recently that there have been changes to the Spanish tax system Spanish Inheritance Tax Set To Change | Worldwide Lawyers might be worth an investigation? It doesn't affect myself or the wife just yet but I imagine it will for a whole load of people in this forum.
Cheers
Graham

Re: British tax allowance
 

Hi,Graham,my subject is about the possible withdrawal of income tax allowance for british expats mooted to happen in the forthcoming general election,and I state that the chancellor of exchequer could not "get away" with it as it would be contrary to EU policy.It's nothing to do with inheritance tax! Thanks anyway for the replies so far,I don't think Osborne can pull this off with anybody regardless of having a government/local gov. pension or not.

Re: British tax allowance
 

Which EU policy would this be against?

Re: British tax allowance
 

As Fred said the income tax allowance for ex pat Britons is under review. Reading through the various reports about this it is likely that if the majority of your total income originates in UK then you will keep the allowance.

Having said that the only income taxable solely in UK is a so called government pension, ie local authority, civil service etc.

Income that is taxable in both UK and Spain includes UK rental income. This means that if your tax allowance is removed you pay more tax on this income in UK. Your Spanish income tax payable on this income is reduced by the UK income tax paid and so it is swings and roundabouts and should not make much difference to you. However UK will retain the tax paid and be better off than Spain who will not be able to net off as much.

Re: British tax allowance
 

Steve thats interestng.

Just to be clear- if one has a CIVIL SERVICE PENSION - its taxable ONLY in the UK?

Thanks

Re: British tax allowance
 

Yes but if you are tax resident in Spain it has to be declared from 2015. It is not taxable as such but is used in the calculation of your total worldwide income and may result in a lower Spanish tax allowance or push you up into a higher tax bracket for your Spanish income.

Spanish income includes UK rental income, interest/dividends from UK banks and companies, ISA interest, premium bond and lottery wins over a certain amount.

Re: British tax allowance
 

I see.

Would be my only income so sounds like I would just have it taxed in UK and no other deductions.

Re: British tax allowance
 

Yes I'm pretty sure the UK wants to do this because the UK tax allowance for things like rental income effectively goes to the Spanish taxman anyway, so they might as well keep it themselves.

Re: British tax allowance
 

That's right, but you will still have to make an annual tax declaration in Spain, even if it resulted in no tax being due.