Pension while in Spain
 

Hi, I've lived in Lanzarote for 10 years and just about to claim my state pension. One of the questions is about living abroad

Will there be any detriment for living here ?

My Spanish accountant is happy that I am still a UK tax resident

Do I have anything to worry about ?

Thanks

Re: Pension while in Spain
 

You have lived in Spain for 10 years - what makes you think you are still UK tax resident?

Re: Pension while in Spain
 

My accountant.

Re: Pension while in Spain
 

Why...? if you have no residency and/or income from the UK, then why are you not on a No Tax tax code?

Re: Pension while in Spain
 

I suspect you may owe the Spanish taxman for 10 years back tax plus fines! Are you officially resident and do you live permanently in Lanzarote?

Re: Pension while in Spain
 

If you live somewhere for ten years it is difficult to not have become tax resident - and would typically involve one or more of the following - [1] spending a significant part of the year, and often the majority of it (183+ days) outside the country, [2] keeping your business/ employment/ investments outside the country and only bringing into the country the money you need to pay living expenses, [3] maintaining (greater) ties to another country, such as a home, job, business, etc.

That said, the EU created a lot of grey areas and it seemed to be quite common in the pre-Brexit era for many Brits in Spain to skate along and avoid tax residency rules and claim that they were tax resident in the UK despite lving for most of the year, and for years at a time, in Spain or portugal. I never really understood why the Spanish and Portuguese governments tolerated that; perhaps the existence of hundreds of thousands of expats was good for the economy, even if their tax status was questionable, and they just didn't want to rock the boat? :unsure:

Unless you have some peculiar circumstances about how you manage your life, you are IMO almost certainly tax resident in Spain, and you need to find yourself a competant accountant if you are going to trust and follow their advice.

BTW "tax residency" is primarily a question of facts, not of choice, except to the extent, as described above, that you're able to manipulate the facts to qualify for the tax residency status that you prefer. E.g. by spending 183 days per year outside of the country. And to be clear, in your case just becuase you choose to pay taxes in the UK that you are not legally required to pay (if you're living outside the UK, that would almost certainly apply to anyone income coming from the UK such as pensions, annuities, dividends, and interest, with only a few exceptions) including on any pensions, whether state, company, or private, that does not make you "tax resident in the UK". ... If you're a retired government employee, and receiving a pension from an occupation such as being a civil servant or in the military, that pension might be taxable in the UK, but that still wouldn't make you a tax resident of the UK!

Re: Pension while in Spain
 

Got a feeling OP is a bit confused. Obviously can't have lived in Spain as a resident for 10 years and not have been a tax resident and also doesn't say if they are talking about a UK or Spanish pension? I suspect they mean a UK pension. If this is the case then they will get a UK pension dependant on their years of contributions. The tax situation is a different thing and unless they were less than 183 days in Spain every year ( in which case they haven't really been living in Spain) they might consider talking to a tax lawyer to sort things out. If they have been paying tax in UK then probably not so bad but if they were actually getting enough income to trigger tax and hadn't declared it in either country , that could be a bigger problem if it was a lot of tax. That said if op has an accountant I'm sure things couldn't be that bad.

Re: Pension while in Spain
 

Sometimes Spanish 'accountants' do not understand the situation regarding Expats. I would say the law is very clear and permanent residents in Spain are also tax residents.

Spanish tax office https://sede.agenciatributaria.gob.e...te-espana.html

Take a look at the tax guide here
https://www.pellicerheredia.com/en/open-library/

Re: Pension while in Spain
 

I am confused I have uk pensions and pay tax in the uk. Does this mean i should also be paying tax in Spain as well? I have been a Spanish resident for over 10 years.

Re: Pension while in Spain
 

As already stated, if you are a Spanish resident, you are also a resident for tax purposes. You inform the UK tax office, and they issue a code of NT (No Tax), so pensions are paid gross (i.e., no tax is deducted). Then, you register with the Spanish tax office, make the annual declaration de renta (tax return), and pay tax to the Spanish system.

This has been well covered on many earlier threads - usually when people are enquiring when they arrive in Spain!!

Re: Pension while in Spain
 

State pensions are taxed in Spain but anyone collecting a Government pension pays tax on these in the UK. So some people will be paying taxes in both countries but not on the same money.

Rosemary

Re: Pension while in Spain
 

Yes good point Rosemary - I always forget about civil servants - we usually get the question what counts as a government pension to pay in the UK so here is the link

https://www.gov.uk/hmrc-internal-man...ual/intm343040

Re: Pension while in Spain
 

It will depend on what pensions they are . Certain pensions military , police, some teachers , NHS and civil servant pensions are UK Government/ Crown pensions. They are taxed in the UK. Even though they are taxed in the UK they should be declared as tax paid to Spanish tax authorities, they don't tax you on it but it is relevant to your income for the tax thresholds. Pensions other than these should be taxed in Spain including UK state pension. That's my understanding as I have crown pension and declare amount to Spain but don't pay tax to them on it, I pay tax to Spain on other income i.e. my state pension and interest on savings etc. There is a form that you submit to HMRC re income that you have taxed in Spain rather than UK .

Re: Pension while in Spain
 

But having said all that (good stuff) the original poster was enquiring about his state pension.

Re: Pension while in Spain
 

Our posts crossed Rosemary but yes people such as myself pay tax to both Spain and UK. The main thing to keep things straight is submit the double tax treaty form to HMRC in this situation to ensure any income taxed in UK is NT (no tax in UK) and on Spanish return show income TAXED in UK . To date I have always done this and not had any issues:fingerscrossed:. I know people in similar situation to me who have simply not declared income which has been taxed in UK to Spanish tax authorities as they have paid tax, they have had problems and large fines plus paying someone to sort it out .