Paying tax on pension?
Jun 29th 2021, 11:38 am
#1
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Thread Starter
Joined: Jun 2021
Posts: 8
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?
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?
Last edited by olivecake; Jun 29th 2021 at 12:18 pm.
Jun 29th 2021, 12:25 pm
#2
Joined: Jun 2006
Location: Granada Costa
Posts: 10,902
Re: Paying tax on pension?
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.
Jun 29th 2021, 2:26 pm
#5
BE Forum Addict
Joined: Jul 2012
Posts: 1,014
