fiscal residencia and UK retirement pension
#1
BE Enthusiast
Thread Starter
Joined: Dec 2011
Posts: 982
fiscal residencia and UK retirement pension
My UK Civil Service pension is taxed at source and paid into my Spanish bank account. I am fiscal resident and when I submit my tax declaration, because my tax is paid in the UK I am not liable to any tax here in Spain. Now however I am also in receipt of a UK retirement pension which is taxed in the UK also as it is added to my total income by HMRC. This pension is paid into a UK bank account.
My question is, this year when I submit my Spanish tax declaration, do I also have to supply information regarding my retirement pension even though I pay tax on it in the UK?
If so, how do I provide the Spanish tax office with the information regarding my retirement pension and the fact that I am taxed on it in the UK and from where do I get this information/proof?
If I just add the gross income from the two pensions to my Spanish declaration, surely they will tax the retirement pension part and I'll find myself being taxed on it in both the UK and here!
Thanks.
My question is, this year when I submit my Spanish tax declaration, do I also have to supply information regarding my retirement pension even though I pay tax on it in the UK?
If so, how do I provide the Spanish tax office with the information regarding my retirement pension and the fact that I am taxed on it in the UK and from where do I get this information/proof?
If I just add the gross income from the two pensions to my Spanish declaration, surely they will tax the retirement pension part and I'll find myself being taxed on it in both the UK and here!
Thanks.
#2
Re: fiscal residencia and UK retirement pension
You must declare your non government pension in Spain even if it is being taxed in the UK.
You can deduct any UK tax paid from any Spanish tax due but it is far better to take advantage of the tax treaty and have it paid gross in the UK. You can do this by getting the right forms (FD9) from HMRC and following the procedure to get the pension paid gross.
Incidentally, from the 1st of January this year you will also have to declare your UK government pension on your Spanish tax return. It will not be taxed as such, but it will affect the tax paid on your other income.
You can deduct any UK tax paid from any Spanish tax due but it is far better to take advantage of the tax treaty and have it paid gross in the UK. You can do this by getting the right forms (FD9) from HMRC and following the procedure to get the pension paid gross.
Incidentally, from the 1st of January this year you will also have to declare your UK government pension on your Spanish tax return. It will not be taxed as such, but it will affect the tax paid on your other income.
#3
Re: fiscal residencia and UK retirement pension
You must declare your non government pension in Spain even if it is being taxed in the UK.
You can deduct any UK tax paid from any Spanish tax due but it is far better to take advantage of the tax treaty and have it paid gross in the UK. You can do this by getting the right forms (FD9) from HMRC and following the procedure to get the pension paid gross.
Incidentally, from the 1st of January this year you will also have to declare your UK government pension on your Spanish tax return. It will not be taxed as such, but it will affect the tax paid on your other income.
You can deduct any UK tax paid from any Spanish tax due but it is far better to take advantage of the tax treaty and have it paid gross in the UK. You can do this by getting the right forms (FD9) from HMRC and following the procedure to get the pension paid gross.
Incidentally, from the 1st of January this year you will also have to declare your UK government pension on your Spanish tax return. It will not be taxed as such, but it will affect the tax paid on your other income.
#4
BE Enthusiast
Joined: Sep 2014
Posts: 323
Re: fiscal residencia and UK retirement pension
UK CIvil Service pensions can only be taxed in UK
#5
Re: fiscal residencia and UK retirement pension
You must declare your non government pension in Spain even if it is being taxed in the UK.
You can deduct any UK tax paid from any Spanish tax due but it is far better to take advantage of the tax treaty and have it paid gross in the UK. You can do this by getting the right forms (FD9) from HMRC and following the procedure to get the pension paid gross.
Incidentally, from the 1st of January this year you will also have to declare your UK government pension on your Spanish tax return. It will not be taxed as such, but it will affect the tax paid on your other income.
You can deduct any UK tax paid from any Spanish tax due but it is far better to take advantage of the tax treaty and have it paid gross in the UK. You can do this by getting the right forms (FD9) from HMRC and following the procedure to get the pension paid gross.
Incidentally, from the 1st of January this year you will also have to declare your UK government pension on your Spanish tax return. It will not be taxed as such, but it will affect the tax paid on your other income.
Civil Service/Police/Teacher/Military Pensions called Government Pensions are taxed at source in UK and you may choose to have them converted to euro's and transfer them to SPAIN.
From this years Spanish tax return Gov pensions must be declared in Spain and they will increase the Spanish tax paid.
#6
BE Enthusiast
Thread Starter
Joined: Dec 2011
Posts: 982
Re: fiscal residencia and UK retirement pension
You must declare your non government pension in Spain even if it is being taxed in the UK.
You can deduct any UK tax paid from any Spanish tax due but it is far better to take advantage of the tax treaty and have it paid gross in the UK. You can do this by getting the right forms (FD9) from HMRC and following the procedure to get the pension paid gross.
Incidentally, from the 1st of January this year you will also have to declare your UK government pension on your Spanish tax return. It will not be taxed as such, but it will affect the tax paid on your other income.
You can deduct any UK tax paid from any Spanish tax due but it is far better to take advantage of the tax treaty and have it paid gross in the UK. You can do this by getting the right forms (FD9) from HMRC and following the procedure to get the pension paid gross.
Incidentally, from the 1st of January this year you will also have to declare your UK government pension on your Spanish tax return. It will not be taxed as such, but it will affect the tax paid on your other income.
BTW, I already declare my government pension and as such, as it it is taxed at source, I don't pay Spanish tax on it.
It's the UK retirement pension I'm concerned about.
#7
BE Enthusiast
Thread Starter
Joined: Dec 2011
Posts: 982
Re: fiscal residencia and UK retirement pension
UK retirement pension called the State Pension. Can be received without tax in UK and transferred direct from pension service to your Spanish Bank Account in euro's.
Civil Service/Police/Teacher/Military Pensions called Government Pensions are taxed at source in UK and you may choose to have them converted to euro's and transfer them to SPAIN.
From this years Spanish tax return Gov pensions must be declared in Spain and they will increase the Spanish tax paid.
Civil Service/Police/Teacher/Military Pensions called Government Pensions are taxed at source in UK and you may choose to have them converted to euro's and transfer them to SPAIN.
From this years Spanish tax return Gov pensions must be declared in Spain and they will increase the Spanish tax paid.
#8
Re: fiscal residencia and UK retirement pension
Thanks Fred, but a bit confused, sticking to the retirement pension only, it's already paid gross into my UK bank, HMRC then take this into account when assessing my tax liability adding it to my government pension. If I get the form you refer to from HMRC, as the retirement pension is already paid gross into my UK bank, do you mean that completing the form will mean it will not be taken into account for tax by HMRC?
BTW, I already declare my government pension and as such, as it it is taxed at source, I don't pay Spanish tax on it.
It's the UK retirement pension I'm concerned about.
BTW, I already declare my government pension and as such, as it it is taxed at source, I don't pay Spanish tax on it.
It's the UK retirement pension I'm concerned about.
#9
Re: fiscal residencia and UK retirement pension
All state pensions are tax free, but that amount is deducted from the tax allowance, other work pensions, whether government or private are taxed but some have to be taxed in the UK, others. such as NHS pensions you can get gross and pay tax on in Spain, in all cases you never pay tax twice due to the reciprocal tax agreement. Even here in the UK all tax is taken from my NHS pension.
Under the new regime this year although you will not pay Spanish tax on your GP already having paid tax in UK, it will result in you having to pay more tax on your SP or other income in Spain and NO allowance will be made for the tax already paid in UK. That to me seems very like double tax!
#10
Forum Regular
Joined: Jan 2010
Posts: 192
Re: fiscal residencia and UK retirement pension
The revised DTA between UK and Spain demands that the CS Pension (and similar) must be declared on the 2016 tax return (for 2015 income). This is then taken into account in calculating the marginal rate payable on other world income, before the CS pension is then deducted (at the base rate of tax) from the total tax due. By this means there is no tax taken from the CS pension by Hacienda, but, as implied above, it may mean that the total tax paid on other world income is higher than it would have been had the revision not been made to the DTA.
There is no need to have your State Pension paid to Spain if you don't want it so. Simply tell the Pension Department the details of your UK bank into which you wish to have it. It is still not taxable in UK for Spanish Tax residents, but the necessary forms have to be completed.
There is no need to have your State Pension paid to Spain if you don't want it so. Simply tell the Pension Department the details of your UK bank into which you wish to have it. It is still not taxable in UK for Spanish Tax residents, but the necessary forms have to be completed.
#11
Re: fiscal residencia and UK retirement pension
Thanks Fred, but a bit confused, sticking to the retirement pension only, it's already paid gross into my UK bank, HMRC then take this into account when assessing my tax liability adding it to my government pension. If I get the form you refer to from HMRC, as the retirement pension is already paid gross into my UK bank, do you mean that completing the form will mean it will not be taken into account for tax by HMRC?
BTW, I already declare my government pension and as such, as it it is taxed at source, I don't pay Spanish tax on it.
It's the UK retirement pension I'm concerned about.
BTW, I already declare my government pension and as such, as it it is taxed at source, I don't pay Spanish tax on it.
It's the UK retirement pension I'm concerned about.
The net result is a much lower tax bill overall.
As for the Government pension, as has been pointed out earlier, it now has to be declared in Spain but no tax is directly paid for it in Spain.
However, it is added to your other income to establish the rate of tax that has to be paid on that other income and it will almost certainly increase the amount of Spanish tax paid overall.
The calculation is quite complex, but "officially" it is not taxed twice, but you will end up paying more tax.
Taking into account the benefits of being taxed in two countries with two sets of allowances, the total tax paid is still less that you would pay if the two pensions were taxed in Spain, which is what happens to all pensioners who are not in receipt of a UK government pension.
Essentially, until this year, recipients of UK Government pensions were treated more favourably than other pensioners and that has now been changed.
#12
Just Joined
Joined: Feb 2015
Location: Lincolnshire
Posts: 7
Re: fiscal residencia and UK retirement pension
So just to recap, when myself and my husband retire and move out to Spain we will have state pensions taxed here, private pensions where tax is deducted here but also private pensions that are paid gross and we declare these on our tax return.
what would we have to pay tax on in Spain?
what would we have to pay tax on in Spain?
#13
Re: fiscal residencia and UK retirement pension
So just to recap, when myself and my husband retire and move out to Spain we will have state pensions taxed here, private pensions where tax is deducted here but also private pensions that are paid gross and we declare these on our tax return.
what would we have to pay tax on in Spain?
what would we have to pay tax on in Spain?
#14
Re: fiscal residencia and UK retirement pension
Just to clarify:-
All pensions except UK government pensions can be "exported" and paid gross in the UK with no tax deducted.
UK government pensions will always be taxed in the UK. The "exported" UK pensions will be taxed in Spain.
And, as you quite rightly point out, annuities are a really good deal when taxed in Spain.
#15
Re: fiscal residencia and UK retirement pension
That sentence doesn't seem to be easy to understand.
Just to clarify:-
All pensions except UK government pensions can be "exported" and paid gross in the UK with no tax deducted.
UK government pensions will always be taxed in the UK. The "exported" UK pensions will be taxed in Spain.
And, as you quite rightly point out, annuities are a really good deal when taxed in Spain.
Just to clarify:-
All pensions except UK government pensions can be "exported" and paid gross in the UK with no tax deducted.
UK government pensions will always be taxed in the UK. The "exported" UK pensions will be taxed in Spain.
And, as you quite rightly point out, annuities are a really good deal when taxed in Spain.