New Income Tax allowances
Jul 5th 2018, 7:02 pm
#1
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New Income Tax allowances
The government's proposals for the 2018 Budget, which should come into effect from today, now include a couple of bits of good news . The minimum income for tax exemption will be increased to €14.000 from the existing limit of €12.000 and there is a further reduction in the rate applied to incomes between €14.000 - €18.000.
Also increases for Spanish pensioners and reduction in VAT on cinema tickets ..
Also increases for Spanish pensioners and reduction in VAT on cinema tickets ..
Jul 5th 2018, 7:26 pm
#2
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Re: New Income Tax allowances
Source please.
Jul 5th 2018, 8:53 pm
#3
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Jul 6th 2018, 6:11 am
#4
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Re: New Income Tax allowances
Looks like good news.
I also heard (from a friend who works in Madrid) that the government was going to phase out the contributions we currently make on prescriptions - anyone seen this officially?
I also heard (from a friend who works in Madrid) that the government was going to phase out the contributions we currently make on prescriptions - anyone seen this officially?
Jul 6th 2018, 6:33 am
#5
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Re: New Income Tax allowances
Jul 12th 2018, 3:38 pm
#6
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Re: New Income Tax allowances
Will this allowance apply in respect of pension drawdown payments from provider in UK? I was sure I saw an allowance of €5,500 in me research earlier. Confused now.
Jul 12th 2018, 6:15 pm
#7
Joined: Jun 2006
Location: Granada Costa
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Re: New Income Tax allowances
The €5550 is the standard, under 65, personal allowance.
Any drawdown payments from a UK provider have always been taxable in Spain if you are tax resident.
There is a special allowance for small incomes which tails off as your income increases. At the moment it is €3700 on incomes between 11250 and 14450, it reduces on a prorated scale to zero above 14450.
If you have investment income above 6500 you don't get this allowance.
This is what Loafing along referred to and the band is being moved up a bit, that is all.
The fact that the minimum income for tax exemption will be increased to €14.000 from the existing limit of €12.000 is a bit of a red herring because most expats need to make an annual tax declaration and those figures are irrelevant as all you get are the normal tax allowances. There is no overall allowance of €12000 or €14000. This refers to the circumstances where you have to submit a tax declaration and are more relevant to Spanish nationals than Expats.
All expats should make an annual tax declaration even if no tax is due to protect their tax resident status for advantageous CGT and IHT allowances. Spaniards do not need to do this as they are by definition tax resident unless they can prove otherwise.
Any drawdown payments from a UK provider have always been taxable in Spain if you are tax resident.
There is a special allowance for small incomes which tails off as your income increases. At the moment it is €3700 on incomes between 11250 and 14450, it reduces on a prorated scale to zero above 14450.
If you have investment income above 6500 you don't get this allowance.
This is what Loafing along referred to and the band is being moved up a bit, that is all.
The fact that the minimum income for tax exemption will be increased to €14.000 from the existing limit of €12.000 is a bit of a red herring because most expats need to make an annual tax declaration and those figures are irrelevant as all you get are the normal tax allowances. There is no overall allowance of €12000 or €14000. This refers to the circumstances where you have to submit a tax declaration and are more relevant to Spanish nationals than Expats.
All expats should make an annual tax declaration even if no tax is due to protect their tax resident status for advantageous CGT and IHT allowances. Spaniards do not need to do this as they are by definition tax resident unless they can prove otherwise.
Jul 12th 2018, 6:41 pm
#8
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Joined: Oct 2017
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Re: New Income Tax allowances
Fred, your information is excellent. Much better than I've had from an "adviser"!! Thank you.
Have you ever considered freelancing your knowledge?
)
Have you ever considered freelancing your knowledge?
)
Jul 12th 2018, 7:10 pm
#9
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Re: New Income Tax allowances
Thanks for the compliment.
Yes, some of these advisors do not seem to cope with the complexity of the expat tax situation. They are often completely fazed by the fact that annuities ( so common amongst expats) are treated very favourably in Spain and even the staff at the tax offices have no idea about the new rules on UK government pensions!
I retired early 25 years ago and the idea of making money again left me years ago - I am more than happy to pass on what I know for the benefit of others. It may not always be correct but most of the time it is which is more than can be said by some of the “professional advisers”
Yes, some of these advisors do not seem to cope with the complexity of the expat tax situation. They are often completely fazed by the fact that annuities ( so common amongst expats) are treated very favourably in Spain and even the staff at the tax offices have no idea about the new rules on UK government pensions!
I retired early 25 years ago and the idea of making money again left me years ago - I am more than happy to pass on what I know for the benefit of others. It may not always be correct but most of the time it is which is more than can be said by some of the “professional advisers”
Jul 12th 2018, 7:28 pm
#10
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Joined: Oct 2017
Posts: 34
Re: New Income Tax allowances
Thanks for the compliment.
Yes, some of these advisors do not seem to cope with the complexity of the expat tax situation. They are often completely fazed by the fact that annuities ( so common amongst expats) are treated very favourably in Spain and even the staff at the tax offices have no idea about the new rules on UK government pensions!
I retired early 25 years ago and the idea of making money again left me years ago - I am more than happy to pass on what I know for the benefit of others. It may not always be correct but most of the time it is which is more than can be said by some of the “professional advisers”
Yes, some of these advisors do not seem to cope with the complexity of the expat tax situation. They are often completely fazed by the fact that annuities ( so common amongst expats) are treated very favourably in Spain and even the staff at the tax offices have no idea about the new rules on UK government pensions!
I retired early 25 years ago and the idea of making money again left me years ago - I am more than happy to pass on what I know for the benefit of others. It may not always be correct but most of the time it is which is more than can be said by some of the “professional advisers”
I was in the pensions industry for 30 years so my UK knowledge is very good. Different ball game from the expat angle though!! Plus, tax is a minefield too.
