marcbernard

Fred
Where do you get €12400 tax allowances from? I am 80 and for 2016 I had 2000 + 8100.

Fred James

There is another allowance for people with incomes not exceeding €14450. It is another €3700. If you earn 11250 or less you get the full amount. If you earn more it decreases rapidly until your income reaches €14450 where is is zero.

It isn't going to affect too many (non government) pensioners as they usually have an income greater than €14450 from the state pension plus other income etc. It is especially relevant to those with a government pension as they are more likely to have a taxable income (in Spain) that falls into that band.

marcbernard

Fred
What you say is partially true. However since the revised DTA under which the Government pension is to be declared also, thus adding it to the gross overall income which is used to calculate the "Earned Income" allowance, before being exempted from further tax in Spain, it is now rare for the extra relief you describe being available for those having UK government pensions. This trick thus impacts on the net Spanish tax. Do you not agree?

Fred James

The Govt pension is not added to the other income, it is declared separately as exempt income. It does affect the tax paid on the other income, but it does not affect whether or not you get the 3700 allowance.

I have just run a simulation on the AEAT Renta program using a normal income of €11000 with an exempt income of €14000 and the €3700 allowance was still allowed, although the total tax paid did increase slightly because of the declaration of the exempt income..