Paying tax on pension?
I moved to Spain a little over 2 years ago after I retired, hoping to live here on my small but adequate pension of around 16,000 euros per year. And of course I expected to pay some taxes on my pension, but I've noticed the tax I am paying here is several times higher than I would have been paying in the UK!
The problem seems to be that the taxable amount is 12,500 here, and if you go over this by just 1 euro, they charge you tax on the entire amount, not just the excess. So I was wondering if there is any way I could reduce this, or possibly claim something as an expense that could put me under the limit. I am not working right now, but I am thinking to support my son in starting a new business here in the next few months and would be giving him some amount of money from my savings to do this, so maybe there could also be a way to use this situation for a better tax rate? I asked my gestor about it, but they didn't seem to have any ideas. So maybe it is a long shot, but I thought I would just try here in case anyone has any out of the box suggestions? |
Re: Paying tax on pension?
Originally Posted by olivecake
(Post 13023321)
The problem seems to be that the taxable amount is 12,500 here, and if you go over this by just 1 euro, they charge you tax on the entire amount, not just the excess. The current allowances are:- Personal allowances Up to 65 5550 Over 65 6700 Over 75 8100 General allowance 2000 Low income allowance Income up to 13115 you are allowed an extra 5565 Incomes between 13115 and 16825, it reduces on a prorate scale to zero above 16825. If you have investment income above 6500 you don't get this allowance. |
Re: Paying tax on pension?
Oh ok. Maybe something has been lost in translation. So if my pension is 15,000GBP, how much should my allowance be? Because I just had to pay 1,750 euros in taxes for 1 year.
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Re: Paying tax on pension?
On €16860 (1.124 exch rate)
Tax is (varies slightly depending on region) Age under 65. €1889 Over 65. €1671 Over 75. €1441 |
Re: Paying tax on pension?
Originally Posted by Fred James
(Post 13023388)
On €16860 (1.124 exch rate)
Tax is (varies slightly depending on region) Age under 65. €1889 Over 65. €1671 Over 75. €1441 |
Re: Paying tax on pension?
I would be worried if my figures were wrong as they are from the tax office tax simulator
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Re: Paying tax on pension?
Ok I see, yeah that is more or less what I paid. It seems like a lot though. I guess there isn't any way to reduce it though?
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Re: Paying tax on pension?
Sadly, no, apart from getting older!
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Re: Paying tax on pension?
Not hard!
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