Civil Service Ill Health Pension
Mar 5th 2019, 3:27 pm
#1
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Location: Shropshire
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Civil Service Ill Health Pension
Hello all.
I am aware that all UK government pensions are taxed in the UK but need to be declared in Spain and used against tax allowances if working there. I am however in receipt of a Prison Service Section 11 ill health pension that is made up of 2 components, my 'taxable pension' and an annual tax free injury award that is added to this to bring my income up to a specified level. These two are combined to make up my annual pension and monthly payments. My query is relating to how this pension would be included in a spanish tax return. In the UK, the only part of my pension that I need to declare to any organisation is the taxable part and it is only this amount that is given on my P60. My notice of future payments gives the total pension payable for the year, monthly payments and tax payable which is nil. Because my taxable pension is less than my tax allowance, my net pension is the same as my gross pension.
For example, say my taxable pension is £9000 (it isn't) and my tax free annual allowance is £8000 (it isn't) then the only income i declare in the UK is £9000 but the gross income is £17000. Would I declare only the taxable part only as I need to do in the UK? It would look strange on a spanish tax return to list my gross income as £17000 but tax paid as nil.
Anyone out there in receipt of a similar pension (civil service, police, armed forces) that include a tax free allowance that could tell me how their pension is declared. I'm not concerned about my pension or any part of it being taxable in spain as the combined amount is referred to as my annual pension on the Principal Civil Service Pension Scheme payment advice I receive, but I would like advice on how it would be declared.
I will of course take proper advice from someone qualified in spansih tax law closer to the time but advice would be appreciated.
Many thanks,
John
I am aware that all UK government pensions are taxed in the UK but need to be declared in Spain and used against tax allowances if working there. I am however in receipt of a Prison Service Section 11 ill health pension that is made up of 2 components, my 'taxable pension' and an annual tax free injury award that is added to this to bring my income up to a specified level. These two are combined to make up my annual pension and monthly payments. My query is relating to how this pension would be included in a spanish tax return. In the UK, the only part of my pension that I need to declare to any organisation is the taxable part and it is only this amount that is given on my P60. My notice of future payments gives the total pension payable for the year, monthly payments and tax payable which is nil. Because my taxable pension is less than my tax allowance, my net pension is the same as my gross pension.
For example, say my taxable pension is £9000 (it isn't) and my tax free annual allowance is £8000 (it isn't) then the only income i declare in the UK is £9000 but the gross income is £17000. Would I declare only the taxable part only as I need to do in the UK? It would look strange on a spanish tax return to list my gross income as £17000 but tax paid as nil.
Anyone out there in receipt of a similar pension (civil service, police, armed forces) that include a tax free allowance that could tell me how their pension is declared. I'm not concerned about my pension or any part of it being taxable in spain as the combined amount is referred to as my annual pension on the Principal Civil Service Pension Scheme payment advice I receive, but I would like advice on how it would be declared.
I will of course take proper advice from someone qualified in spansih tax law closer to the time but advice would be appreciated.
Many thanks,
John
Mar 5th 2019, 4:07 pm
#2
Joined: Jun 2006
Location: Granada Costa
Posts: 10,903
Re: Civil Service Ill Health Pension
On your tax return, all you have to enter is the total amount of your exempt pension, which is your government pension. You do not give any details of UK tax paid. This will affect the tax you pay on the rest of your income, but if your other income is just the UK state pension it makes almost no difference to the Spanish tax paid.
Whether the injury part of it needs to be declared I do not know. Personally, I would assume that it should not be included. You have to remember that in Spain it is a totally self declaration system so you do not have to produce any details or proof of your income.
The biggest problem you will face is getting them to understand the whole concept of UK Government pensions/new tax treaty and most lawyers/gestors and even the tax officials in the local office may not have the slightest idea what you are talking about.
Whether the injury part of it needs to be declared I do not know. Personally, I would assume that it should not be included. You have to remember that in Spain it is a totally self declaration system so you do not have to produce any details or proof of your income.
The biggest problem you will face is getting them to understand the whole concept of UK Government pensions/new tax treaty and most lawyers/gestors and even the tax officials in the local office may not have the slightest idea what you are talking about.
Mar 5th 2019, 6:38 pm
#3
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Joined: Mar 2007
Location: Shropshire
Posts: 305
Re: Civil Service Ill Health Pension
Thanks for the advice Fred.
The double taxation treaty doesn’t mention non taxable income so I’m not sure whether for tax purposes in Spain both parts need to be declared. I’m sure it would cause some confusion for tax officers in Spain if that’s what I have to do. Don’t you have to provide P60’s for UK income with your tax returns.
There must be other people out there who have similar pensions, I will just have to hope some of them look at this forum.
Thanks again.
John
The double taxation treaty doesn’t mention non taxable income so I’m not sure whether for tax purposes in Spain both parts need to be declared. I’m sure it would cause some confusion for tax officers in Spain if that’s what I have to do. Don’t you have to provide P60’s for UK income with your tax returns.
There must be other people out there who have similar pensions, I will just have to hope some of them look at this forum.
Thanks again.
John
Mar 5th 2019, 8:51 pm
#4
Joined: Jun 2006
Location: Granada Costa
Posts: 10,903
Re: Civil Service Ill Health Pension
No, you just declare your income in the relevant box on your tax declaration. No paperwork needed unless in the unlikely event that they challenge your declaration. Gestors might ask for backup if you ask them to submit your declaration but otherwise no.
Mar 6th 2019, 7:17 am
#5
Started off with nothing
Joined: Feb 2009
Posts: 4,946
Re: Civil Service Ill Health Pension
I would have thought you are in a similar situation to those who are in receipt of non taxable benefits from the UK?
I would declare the total amount of you tax exempt pension. In practise, no tax would be due on whatever amount you declare.
As Fred suggests you need advice. I would suggest you ask your pension provider, they will have a help desk.
I would declare the total amount of you tax exempt pension. In practise, no tax would be due on whatever amount you declare.
As Fred suggests you need advice. I would suggest you ask your pension provider, they will have a help desk.
Last edited by missile; Mar 6th 2019 at 7:20 am.
