djh16232

My wife and I are planning on moving to spain from uk next year now that kids have flown th e nest. I am in receipt of a police pension, my wife has none. We will.sell our main property and keep proceeds in our uk bank.We have a smaller house which we rent out and intend to use rent gained to finance spanish rental.We are not at state pension age.Does anyone know of tax implications regarding my pension, lump sum in uk account and still renting out property in uk?

Siouxie

Hello and welcome to BE!

I would suggest posting your questions to the Spain forum, I'm sure there are many people who can give you advice.



http://britishexpats.com/forum/forumdisplay.php?f=75

Sue

Hi djh16232,

Welcome to BE!!

You must be so excited about your upcoming move and I'm sure you have lots of questions buzzing around in your head, so I'm sure you will pick up lots of tips here.

I can't help with your initial question, but I've moved your thread to our Spain forum for you and I'm sure someone will be along soon who can share some pointers. In the meantime take some time to read through some of the other threads and get to know everyone.

Rosemary

As Concierge for the Spanish section of BE I would like to say hello and welcome.

BE is a very large expat website, so if you have problems finding your way around we have concierges who will try to direct you. The moderators for the Spanish forums are Mitzyboy and Fred James, moderators are there to ensure that the site runs smoothly within the rules of BE. Problems and complaints should always be addressed to a moderador who will look into the matter and deal with it efficiently and fairly. Our members who post in the Spain Forums are friendly and helpful with a wealth of knowledge of the issues of living in Spain. At the top of the page you will find a quirkily named thread called Free Beer which is full of important and useful information. Hope you enjoy your time participating in the forums.

Please let me know if you need any further help.

Rosemary

me me

Timing, timing, timing.

And welcome.

EsuriJohn

Do NOT stay in Spain for more than 182 in any calendar year with the arrangements you have described. There are lots of threads on here that describe the tax problems you will face if you do and there are more to come with changes to the Double Taxation Treaty this year for the next Spanish tax year starting Jan 1st 2014.

snikpoh

What changes are these? Not seen anything about these (on here or else where).

Fred James

They affect people with UK government pensions.

Under the present treaty these pensions are taxed exclusively in the UK. There has always been a question mark over whether they need to be declared in Spain. They cannot be directly taxed in Spain but if you have other income that is taxed in Spain the existence of these pensions could affect the tax rate you pay on your declared income.

In the past the advice given by most advisors and most tax offices is that these UK government pensions should be ignored totally.

The new tax treaty, which has yet to come into force, makes the situation quite clear - they must be declared in a special section of your annual tax declaration as "exempt" income. Whether this will affect the tax you pay on the other income depends on a number of factors such as the amounts of both these incomes and also any tax allowances you have in Spain.

EsuriJohn

This man is a retired police officer a GP pensioner. Also if you look at Mitzi's comments on the asset declaration if this chap has £100,000 Lump sum in a bank account in UK together with a flat rented out and the proceeds of a house sale I would say at the moment stick to less than 182 days pa.

Fred James

If he seems to want to live in Spain then that won't be an option long term. However if he sells the house next year it is essential that he doesn't become tax resident in the same year.

As me me said - timing is everything!

IamStu

I was recently talking with an older gentleman who puts his money in a trust. I´m not sure of the full details but he was saying that if you have at least 100k, the trust manages your money, pays your interest and it avoids any double taxation. I´m sure there are those on here that are wiser than me on the subject but thought I´d throw in my two penneth.

Fred James

There is very little "double taxation" on anything within the EU as the tax treaties normally allow for this and even if they don't there is always an agreement that if you pay tax twice on the same income (which can easily happen) you can always offset one payment against the other.

You have to be careful with trusts in Spain as the rules can be very different from those in the UK - it needs good professional advice before committing to set up a trust.

EsuriJohn

If the GP is entered in a box other than income and it results in the payment of tax on a state pension which previously did not attract Spanish tax how would you offset the HMRC TAX PAID ON THE GP? This seems to me to be a blind spot where previously pay tax in UK on the GP and no tax in Spain on SP it now seems you must declare the GP in Spain and this affects the tax position of the SP in Spain with no possibility of offset since you are not declaring the GP as income.

Fred James

Correct - it will almost certainly involve you paying more tax.

You cannot offset the UK tax as the UK pension is not actually being taxed in Spain.

It will still be much cheaper than declaring both pensions in Spain so you had better accept that, as an ex-government eployee, you have had a really good deal for the last few years that most other UK pensioners don't get.

HBG

That has to be true, most of us expats have had a good run in Spain, tax wise, and it had to come to an end.

What happens next is guess work, but one way or another most of will have to pay more - if we stay.