CaminoConvert

Hello,
I'm trying to find a reliable and knowledgable financial adviser, who understands current Spanish law relating to the taxation of UK pensions. I'm a Spanish resident, have withdrawn my UK private pension as a lump sum and am now in the process of completing my first RENTA declaration. I need to know if my private pension will be taxed as a retirement savings scheme, or as a pension (as different tax rates apply) and also whether my pension lump sum payment could be eligible for the 40% tax-free allowance on contributions made prior to 2007 (the pension was paid-up and contributions ceased in 1997).
If anyone has personal experience of a good adviser, who is fully up-to-date with current Spanish tax law related to UK lump-sum pension payments, I'd very much appreciate a recommendation.
Many thanks

Rosemary

Send a message to this guy, he is extremely knowledgeable, speaks English and is very approachable.

Pablo Faus Bañuls

GRUPO FAUS CONSULTORES S.L.
CL Alfaro nº 2 - 46701 Gandia
Tlf. 96 296 58 59


Rosemary

CaminoConvert

Wow! Thanks very much Rosemary. I wasn't sure anyone would reply, and certainly not so quickly. I'm very grateful to you.
All the best

Notdunroamin

I would help if you said where you are, Rosemary's recommendation may be the best in the business but being in Gandia is perhaps not the most convenient location for you.

First of all put all UK rules and tax allowances out of your mind as they mean absolutely nothing in Spain!

Income from a private pension is taxed the same as any other so is lumped together with other income such as from a state pension for instance, it can only benefit from the more favourable taxation of a retirement savings scheme if it was purchased entirely with your own money, in other words with a fund accrued with no employer contributions.

Regarding a lump sum, to escape tax you need to have withdrawn it before becoming tax resident, advice commonly given is to take it either in the Spanish tax year before you become resident or in the first half of the tax year before taking up residency in the second half.

When you say "have withdrawn my UK private pension as a lump sum" do you mean 25% or the whole sum?

Rosemary

Area is not that important because he can provide advice using e-mails and if necessary by telephone. I have not set eyes on him for about 12 years but he is still my advisor and deals with my tax every year.

Rosemary

PoloMarco

The text highlighted in bold above… do you happen to know the Spanish terminology for this so I can research further?

Thanks

CaminoConvert

Thanks Rosemary, that’s my view also.

CaminoConvert

Thanks for this detailed reply Notdunroamin, I appreciate it. And yes, I’m well aware of how different the UK and Spanish taxation systems are, hence my request for a recommendation of an adviser who is knowledgable, reliable and up-to-date.
The part of your reply about pension plans only being regarded as savings plans if there have been no employer contributions is very useful. Many thanks for this and for taking the trouble to reply.
All the best

CaminoConvert

And, in case my reply didn’t reach you last night Rosemary (as I don’t see it in the thread feed) thank you very much for the speedy reply and for the recommendation. I’m very grateful to you.
All the best