dougal03

If you do have any assets in Spain just remember to make out a Spanish will.You can opt for your wishes to be regarded as under the regulations of your birth country which will be stated as such on that will'Otherwise it will come under the regulations of Spanish inheritance i.e. you cannot disinherit your nearest & dearest.The Notario will also have it written that he is of a different nationality & it is being translated to you in your own language.

bobd22

A UK State Pension should be taxed in Spain not the UK? Crown pensions are only taxed in the UK as far as I am aware unless there has been some change a UK State Pension is not Crown Pension rather simply income?

Mustard

Unless I've misunderstood you, I think you are incorrect about the first €5500. I've checked my tax return and it does function as a personal allowance as in the UK.. reducing your gross taxable figure by that amount. Tax is then calculated on the net amount. It would be great if they cancelled the first €5500 of tax, but that would mean a personal tax allowance of €20000. Please correct me if i'm wrong.

bobd22

This is quite a good link explaining medical information and considerations for moving to Spain.

Living in Spain | Healthcare in Spain

Fred James

Firstly, the UK state pension never has tax deducted in the UK. If you have additional income it is taken into account and may result in an increase in the tax paid on the other income. Other pensions will be taxed in the UK but if you go through the correct process with HMRC they will not be taxed in the UK. Whether you go through this process or not, they will all be taxed in Spain. If you end up paying tax in the UK you can offset it against any Spanish tax due on the same income.

The only allowances that are directly deducted from your basic income are a €2000 general allowance and a special low income allowance of up to €3700 but that rapidly reduces to zero when your income exceeds €14450.

The personal allowances (which increase with age) are treated differently. They are not deducted from income but the deduction is calculated against the lowest rate of tax and then deducted from the tax due.

It's a complicated calculation but the online tax program does it all for you and the tax is deducted in two instalments from your bank. I did my annual tax declaration this morning, online, and it took 10 minutes for two individual declarations.

Fred James

UK Government pensions (police etc) have to be declared in Spain. They are not added to your other income directly, but have to be declared as exempt income. This will result in a higher rate of tax being made on your other income. The amount will vary considerably depending on the amount of the exempt income and the amount of normal income.

If you have a significant Government pension and also have other pension or other income on top of your State pension then the additional tax can run into a few thousand.

This did not used to be the case but recent changes to the UK-Spain taxation treaty have changed this.

bobd22

Thanks Fred I am aware of all you say. I posted my reply more to clarify the mistaken comment posted re UK State Pension being taxed in UK not Spain.

Smithy73

Quote > https://www.blevinsfranks.com/news/a...x-spain-part-1
Note that the allowances are not given as a deduction against income (as in the UK), but instead are given as a tax credit against the total tax payable.

Yes it seems more complicated than suggested, but it's still not a straight deduction against income https://www.citizensadvice.org.es/wp...ANCES-2017.pdf

bolton wanderer

Hi Smithy73, so looking at an example from the link you've quoted, the Spanish tax allowance given for a income of €13,250 is €3,387.50. Would you consider that better than the £11,800 personal allowance given to UK residents? Our combined personal tax allowance is currently £23,600. *****EDIT just seen the final tax calculation which suggests that an income of €19,450 would be taxed €2,500 (a marginal rate of 14.39%) which looks a lot better (Still nearly twice as much as in the uk for a similar income)*****

I accept that inheritance tax will be payable on Spanish property and the allowances are far lower than the £325,000 (ish) pp allowance in the UK. (ie as non resident = €0). So our heirs will have to pay inheritance tax on the value of our apartment. This is likely to be offset by the far greater allowances in the UK on our UK property and investments.

There is also the Spanish tax on savings & investments to consider. In the UK you have a £1000 allowance before tax is due on savings and a £2000 (was £5000) allowance on dividends. When you also add in the ability to hold your savings & investments within a tax free wrapper in the UK, such as an ISA, then the tax situation in Spain can become an important consideration.

ShelleyJack

What is the difference between a Crown pension and a State pension - I'm confused!>

ShelleyJack

Can anyone recommend a good English speaking accountant in the Gandia region please?!

mikelincs

State pension is the one usually called 'old age pension' Crown pensions are those where people have served 'The Crown' i.e. police, Armed services, Civil Service etc. NOT the NHS, just people classed as 'in the service of the crown', so consular service etc. These are, by law, taxed in the UK and any tax you pay there is deducted from any tax you would have to pay in Spain, so you do not pay double tax.

ShelleyJack

Thanks Mike

Fred James

If you pay tax in the UK on a Crown pension you cannot deduct the tax from your Spanish tax - it is never liable for tax in Spain so it cannot be double taxation.

Similarly, now that you have to declare the Crown pension in Spain, as it probably increases the overall tax bill, as it is not being directly taxed, again you cannot offset the UK tax against the increased tax in Spain.