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Retiring in Spain

Retiring in Spain

Old Jul 11th 2013, 11:08 pm
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Default Retiring in Spain

We are thinking of moving to the Nerja area of Spain after spending many months in the area. We have lived abroad before and are not daunted by moving away from England, however, we are trying to find out what the situation is with pensions. I am over 65 and receive a state pension, and I believe that I will not be liable for any tax in Spain as the allowances I think are basic €5151, additional €918 and another of €4080 as my income is under €9180. My husband is 62 and receives a private pension, and will therefore still be allowed the €5151, but here is where we get stuck - will the deductions be based on the €4080-2652 based on an income of between €9180-13260 at 24%? We will be selling our english home and buying in spain only a small property as we are not capital or income rich. Any other advice would be helpful on general costs compared with England. Looking forward to any replies - first time on the forum.
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Old Jul 11th 2013, 11:58 pm
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Default Re: Retiring in Spain

Hi and welcome to BE.

I have moved your thread over to our Spain forum. I'm sure there will be someone along soon to help you.
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Old Jul 12th 2013, 12:21 am
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Default Re: Retiring in Spain

Your figures are correct but in your husband's case it depends on the nature of his private pension.

If it is an annuity then it is taxed totally differently and very advantageously.

If it is a company pension then like the state pension, it is treated as earned income. The €4080 allowance only applies to earned income and, as you know, that is on a sliding scale. Any taxable income after the deductions is taxed at 24.75% up to €17k.

Annuity income is taxed as savings income but only about a quarter of it is taxed. The base tax rate is 21% up to €6k, 25% from €6k to €24k and 27% above that.

Even if the total allowance means that you are not due any tax, you should still submit an annual tax return.
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Old Jul 12th 2013, 12:21 am
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Default Re: Retiring in Spain

Originally Posted by Bothwicks
We are thinking of moving to the Nerja area of Spain after spending many months in the area. We have lived abroad before and are not daunted by moving away from England, however, we are trying to find out what the situation is with pensions. I am over 65 and receive a state pension, and I believe that I will not be liable for any tax in Spain as the allowances I think are basic €5151, additional €918 and another of €4080 as my income is under €9180. My husband is 62 and receives a private pension, and will therefore still be allowed the €5151, but here is where we get stuck - will the deductions be based on the €4080-2652 based on an income of between €9180-13260 at 24%? We will be selling our english home and buying in spain only a small property as we are not capital or income rich. Any other advice would be helpful on general costs compared with England. Looking forward to any replies - first time on the forum.
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
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Old Jul 12th 2013, 1:36 am
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Default Re: Retiring in Spain

Having read the interview with MEP Michael Cashman, in the Costa Blanca News, I wouldn't be in a rush to move here!
Holidays yes, but wait and see what will happen if Britain leaves Europe!
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Old Jul 12th 2013, 3:24 am
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Default Re: Retiring in Spain

Originally Posted by Bothwicks
We are thinking of moving to the Nerja area of Spain after spending many months in the area. We have lived abroad before and are not daunted by moving away from England, however, we are trying to find out what the situation is with pensions. I am over 65 and receive a state pension, and I believe that I will not be liable for any tax in Spain as the allowances I think are basic €5151, additional €918 and another of €4080 as my income is under €9180. My husband is 62 and receives a private pension, and will therefore still be allowed the €5151, but here is where we get stuck - will the deductions be based on the €4080-2652 based on an income of between €9180-13260 at 24%? We will be selling our english home and buying in spain only a small property as we are not capital or income rich. Any other advice would be helpful on general costs compared with England. Looking forward to any replies - first time on the forum.
You should also consider the capital gains tax aspect of your move.
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Old Jul 12th 2013, 3:31 am
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Default Re: Retiring in Spain

Originally Posted by me me
You should also consider the capital gains tax aspect of your move.
Of course, but if you reinvest the money from the sale of your UK home in a new Spanish home you can avoid any CGT.

The "roll over" relief applies to a move from the UK to Spain or vice versa so long as both properties are your "habitual home" and you reinvest within 2 years.
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Old Jul 12th 2013, 6:05 am
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Default Re: Retiring in Spain

Originally Posted by Neptuno
Having read the interview with MEP Michael Cashman, in the Costa Blanca News, I wouldn't be in a rush to move here!
Holidays yes, but wait and see what will happen if Britain leaves Europe!
or you might get run over by a bus
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Old Jul 12th 2013, 6:19 am
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Default Re: Retiring in Spain

Originally Posted by mogsmum
or you might get run over by a bus
That might be a good thing for a troll with a trident
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Old Jul 14th 2013, 1:42 am
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Default Re: Retiring in Spain

Thank you for all the replies. My husband does have a private pension and will receive a state pension in three years, so we know we will now be liable for taxes in Spain. We will be selling our house in GB, and renting for a few months and hopefully be able to buy in Spain. We have read that if you take out a Spanish mortgage you can get extra tax relief on your earned income?
Are there any rules when choosing solicitors, banks etc. to ensure they are OK.

Also hope I am using the threads properly, first time we have used anything like this!

Bothwicks
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Old Jul 14th 2013, 2:57 am
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Default Re: Retiring in Spain

Originally Posted by Bothwicks
T We have read that if you take out a Spanish mortgage you can get extra tax relief on your earned income?
Not any more - it was abolished at the end of last year but it is entirely possible that the government will do a u-turn. Existing mortgages are not affected.

It was a really sensible move. What do you do when you have a housing crisis? Abolish tax relief! You couldn't make it up it you tried
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Old Jul 14th 2013, 4:47 am
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Default Re: Retiring in Spain

Originally Posted by Bothwicks
Thank you for all the replies. My husband does have a private pension and will receive a state pension in three years, so we know we will now be liable for taxes in Spain. We will be selling our house in GB, and renting for a few months and hopefully be able to buy in Spain. We have read that if you take out a Spanish mortgage you can get extra tax relief on your earned income?
Are there any rules when choosing solicitors, banks etc. to ensure they are OK.

Also hope I am using the threads properly, first time we have used anything like this!

Bothwicks
Just ensure that you do NOT use the lawyers the agent suggests, get an independent one, look round, talk to people while you are renting, ask for recommendations.
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Old Jul 14th 2013, 6:26 am
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Default Re: Retiring in Spain

Originally Posted by Bothwicks
We are thinking of moving to the Nerja area of Spain after spending many months in the area. We have lived abroad before and are not daunted by moving away from England, however, we are trying to find out what the situation is with pensions. I am over 65 and receive a state pension, and I believe that I will not be liable for any tax in Spain as the allowances I think are basic €5151, additional €918 and another of €4080 as my income is under €9180. My husband is 62 and receives a private pension, and will therefore still be allowed the €5151, but here is where we get stuck - will the deductions be based on the €4080-2652 based on an income of between €9180-13260 at 24%? We will be selling our english home and buying in spain only a small property as we are not capital or income rich. Any other advice would be helpful on general costs compared with England. Looking forward to any replies - first time on the forum.
might be good move when they go back to the peseta!!!!!!!!!!
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Old Jul 14th 2013, 6:34 am
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Default Re: Retiring in Spain

Originally Posted by freeman1
might be good move when they go back to the peseta!!!!!!!!!!
Why?
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Old Jul 14th 2013, 7:11 am
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Default Re: Retiring in Spain

Originally Posted by Fred James
Why?
why!!!!!!!!!!!!! are you also employed in Brussels?

well you will get millions more pesetas for your £££££££££,very simple,
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