Re: Gifting/loaning money in Spain? (taxes)
 

Yes I am confused. You cant be a tax resident in 2 countries. You might pay tax in both but only one country is your tax residence.

Re: Gifting/loaning money in Spain? (taxes)
 

Very common to pay tax on both Spain and UK those with Crown Pensions or who rent out a UK property for exame. However you are resident in only one country which is decided by the tax treaty rules. Paying tax in the UK does not mean you are tax resident there per say it depends upon physical residency.

Re: Gifting/loaning money in Spain? (taxes)
 

👍👏🏻

Re: Gifting/loaning money in Spain? (taxes)
 

There is a simple rule that income is taxed in the country in which the income arises, irrespective of the tax residency of the recipient.

So, a UK state pension is taxable in the UK but as an exception HMRC allow it to be paid gross but only if you have applied for this exception and can prove that it is being taxed in Spain. This is not part of the Tax Treaty but a specific exception

The situation with regard to government pensions is specifically covered by the Tax Treaty but they do have to be declared in Spain under the heading of exempt income. This does mean that they are not taxed directly as income in Spain but the amount of this exempt income wii be added to the overall tax calculation and usually results in an increase in the Spanish tax due on any other income.

Re: Gifting/loaning money in Spain? (taxes)
 

When I got my state pension they asked did I want it gross and direct to Spain. I said yes although I must admit I didn't realise it was optional. I declare it savings interest interest etc to Spain and declare details of government pensions and tax I have paid etc. To date I am very happy with Spanish tax I pay. I give my gestor all the information he sorts it out and I sleep well at night.

Re: Gifting/loaning money in Spain? (taxes)
 

But why, then, is pension income from a UK employer's scheme (not a Crown pension) or from a UK private pension not also taxed in the UK; as it is in the UK where that income arises?

I wish we had a double taxation treaty like the USA apparently does with Spain, whereby for example US Social Security (presumably their equivalent of a state pension) is not taxed by Spain but only by the US.

Re: Gifting/loaning money in Spain? (taxes)
 

As I said, pensions, private or employers pensions, are not taxed in the UK if you apply to HMRC for them to be exempt. Actually they are still in the UK tax system but they are tax coded as zero or equivalent and as such are not taxed.

Re: Gifting/loaning money in Spain? (taxes)
 

Sorry to be waking this thread up again, but do you have any links to more information about this? Right now I am paying a huge amount of tax to Spain for my government pension, but if what you are saying is correct this is a mistake (or rather bad choice) and I could choose to only pay the UK rates?