Re: Declaring income
 

When I was looking into doing a bit of guiding for birdwatchers I discussed it with my lawyer and she was adamant that despite being 65+ I would still have to pay the autonomo as i would be self-employed. No exceptions she said. That really killed the idea for me. Was she wrong?

Re: Declaring income
 

On a slightly different tack, Rafikiphoto, with apologies for not replying directly to your point, yesterday my wife and myself paid our annual visit to our accountant. We came back a bit shell-shocked, our tax had increased by almost 50%, due to tax changes caused by the crisis. Last year it was about 3,800 euros, this year close to 6000 euros. Our respective pensions from UK had only increased marginally, as with all pensions.
Our accountant said that it was just for two years - but I cannot see the government reducing tax in 2014.
Had I been in the lucky position of having one foot in the UK and one in Spain, I'd seriously consider treating the UK as my home address and get taxed accordingly.
Mind you, I've no idea now what my UK tax would be. I should add that our combined income, purely from pensions, including standard UK pension, is about 38,000 euros, for those good at tax matters.

Re: Declaring income
 

I think you are right,
doing anything - i.e. denouncing, will mean one less friend
and could indicate to others you are not a true friend.

sri

Re: Declaring income
 

There is something wrong here. The increases in taxes announced because of the "crisis" couldn't possibly result in an increase that large and anyway they don't apply to last years income.

I have just done my tax returns and there was no significant change (apart from changes to income due to a very small change in the official exchange rate).

Re: Declaring income
 

Thanks Fred,
I've just been informed my my accountant that the reason for the huge increase in taxable income (in Spain) is due to the fact that up until now, State pension, as paid by the UK Government, has not been taxed in Spain.
Now it is, and the increased taxation is phenomenal, something that :unsure:all would-be Spanish immigrants should be aware of.

Re: Declaring income
 

so have they taxed it twice :confused:

Re: Declaring income
 

UK doesn't tax UK State pensions payable to ex-pats. As far as I've been aware for the last five years, at least for ex-pats resident in Spain. I deperately hope there's a mistake, we shall really miss that 2000 euros per year!!!.

Re: Declaring income
 

Of course it has!

Nothing has changed apart from the fact that your "accountant" hasn't a clue what he is doing!

Get a new accountant! My UK state pension has always been taxed in Spain.

If he has not been declaring it for the last few years you are going to get a HUGE back tax bill and fines!

Re: Declaring income
 

No they don't - but only if you submit the right forms to prevent them doing that.

Re: Declaring income
 

My State pension isn't taxed in UK but I don't recall ever having asked for that and it's paid in UK not Spain.

Re: Declaring income
 

If you want to have your pensions (state or otherwise) paid gross in the UK, which is an option under the taxation treaty, you have to convince HMRC that you are paying tax on it somewhere else.

There has always been a form (FD9) which you can fill in with details of your pension income, which is submitted to Hacienda who note that income and return you the form, duly stamped. That goes back to HMRC who then issue a zero tax code to your pension provider.

The alternative method, sometimes used when Hacienda have refused to accept the form, is to send HMRC a copy of your tax declarations or a certificate of Spanish tax residency.

If someone only has the state pension as their UK income then of course this is always paid gross anyway so it would not be necessary to go through this procedure but of course the pension would still have to be declared in Spain even if no tax was due on it.

Re: Declaring income
 

Apologies Fred, I worded that badly. I should have said that my state pension isn't taxed at source. It was taxed as part of my last UK tax return. My private pensions are taxed at source in UK at the moment. This year is my first Spanish tax return. I have the form FD9 which my accountant recommends sending to HMRC with a certificate of tax residency once this year's Spanish tax return is finalised.

Re: Declaring income
 

but looking at Spanish tax sites, thought pensioners were only taxed on a percentage of their pension income not the whole lot, depending on their actual age

In the UK we have to thank the Liberal Dem's for forcing the personal allowance up to a level where those on low incomes completely escape the tax man

As to not declaring UK pension income if it is taxed in the UK (the state pension wouldn't be taxed as it is less than the personal allowance) seems a lot of Spanish based accountants have been doing that.

Don't the SPanish and UK tax authorities swap info?

Blame the EEC for this, they are making sure that people DO pay taxes when living in two countries in Euroland, and getting all the countries to tax in a similar way.

Re: Declaring income
 

That only applies to annuities that have been personally bought by the pensioner from their pension pot.

These are taxed very favourably in Spain on the basis that most of the income is your own capital rather than interest earned.

If you take out an annuity at 65 you only pay tax on 24% of the income. Also the tax rate is the savings tax rate not the normal rates so the tax starts at 21% rather than 24.75%.

It does not apply to any other sort of pensions which are treated as earned income.

Re: Declaring income
 

She was wrong.

What would a lawyer, least of all a Spanish one know about the tax system :D

Look on the seg.soc site for starters and if you still want to do it find a good gestor........ or do what everyone else does ;)