Spanish income tax.
Mar 2nd 2019, 5:52 pm
#1
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Spanish income tax.
We are pensioners and looking at moving to Spain and having our pension transferred each month.But after looking at the income tax we are wondering if this would be a good move financially.
How do expats cope with such high rates?
How do expats cope with such high rates?
Mar 2nd 2019, 6:04 pm
#2
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Location: Granada Costa
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Re: Spanish income tax.
You don’t have an option. If you come to live in Spain you pay Spanish tax.
The tax rates are higher and the allowances are lower. Certain pensions such as annuities are very much lower for tax
How do you cope with it? Simple, you just pay the tax and save money on your other living expenses.
The tax rates are higher and the allowances are lower. Certain pensions such as annuities are very much lower for tax
How do you cope with it? Simple, you just pay the tax and save money on your other living expenses.
Mar 3rd 2019, 8:10 am
#3
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Re: Spanish income tax.
Fred is quite right, you cannot have everything in life. We do not know any details of your pension income so that makes your question slightly difficult. Cost of living can be less in Spain. If you shop around you can get a bottle of London Dry Gin for 5€, packet of fags 5€, bottle of wine under 2€.
Mar 3rd 2019, 9:37 am
#4
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Re: Spanish income tax.
Thanks both.
Just came as a bit of a shock when researching life in spain.
Probably wait and see the outcome of Brexit first.
Just came as a bit of a shock when researching life in spain.
Probably wait and see the outcome of Brexit first.
Mar 3rd 2019, 11:35 am
#5
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Re: Spanish income tax.
The last part is wise. I am surprised that likelyhood of paying tax in spain would come as a surprise? It does also depend upon type of pensions you have i.e. state, private or crown? State and private declare and pay Spanish income tax, crown pensions declare but pay UK income tax but Spain take that into account to assess further income. You would also need to declare any asserts held valued over Euro 50,000. Look up Spanish Modelo 720.
Mar 3rd 2019, 12:32 pm
#6
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Re: Spanish income tax.
The last part is wise. I am surprised that likelyhood of paying tax in spain would come as a surprise? It does also depend upon type of pensions you have i.e. state, private or crown? State and private declare and pay Spanish income tax, crown pensions declare but pay UK income tax but Spain take that into account to assess further income. You would also need to declare any asserts held valued over Euro 50,000. Look up Spanish Modelo 720.
Mar 3rd 2019, 3:07 pm
#8
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Re: Spanish income tax.
Spain is a high tax country. Portugal has a fantastic tax regime for ex pats. Hopefully Spain will see the folly of its ways.
Until then i spend half the year in low tax UK. Losing 30 years of PEPs and ISAs tax free income and gains would be plain silly. For those on lower incomes with fewer assets the decision is more nuanced.
Until then i spend half the year in low tax UK. Losing 30 years of PEPs and ISAs tax free income and gains would be plain silly. For those on lower incomes with fewer assets the decision is more nuanced.
Mar 3rd 2019, 3:16 pm
#9
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Re: Spanish income tax.
The tax rates and allowances depend very much on your income.
A 65 year old pensioner with an income below €11250 gets allowances of €12400 so pays no tax. In the UK the allowance is about €14000
The UK state pension is currently about €9500.
I have a full UK state pension and an annuity and pay far less tax than I would pay in the UK.
A 65 year old pensioner with an income below €11250 gets allowances of €12400 so pays no tax. In the UK the allowance is about €14000
The UK state pension is currently about €9500.
I have a full UK state pension and an annuity and pay far less tax than I would pay in the UK.
Mar 3rd 2019, 5:19 pm
#10
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Re: Spanish income tax.
The tax rates and allowances depend very much on your income.
A 65 year old pensioner with an income below €11250 gets allowances of €12400 so pays no tax. In the UK the allowance is about €14000
The UK state pension is currently about €9500.
I have a full UK state pension and an annuity and pay far less tax than I would pay in the UK.
A 65 year old pensioner with an income below €11250 gets allowances of €12400 so pays no tax. In the UK the allowance is about €14000
The UK state pension is currently about €9500.
I have a full UK state pension and an annuity and pay far less tax than I would pay in the UK.
Thanks for the comments
Really confused now?
From what I have found on line according to the Spanish tax band 19% tax is taken from 0 to 12450 euro and a pensioner age 65 would get an allowance of 6700 euro therefore 19% tax would be deducted from the balance of 2800 of a uk pension up to 12450, then anything from then on up to 20200 would be 24%.
Or do I have it wrong?
Mar 3rd 2019, 7:52 pm
#11
Joined: Jun 2006
Location: Granada Costa
Posts: 10,902
Re: Spanish income tax.
Yes you have. As well as the basic age 65 allowance, everyone gets another €2000 plus up to another €3700 depending on your income. If it is €11250 or below you get the full allowance. If your income is over €14450 you do not get it. In between it is prorata.
With a purchased annuity, you only pay tax on about 25% of the income.
With a purchased annuity, you only pay tax on about 25% of the income.
Mar 3rd 2019, 8:13 pm
#12
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Re: Spanish income tax.
Hi Fred
Thanks for the comments
Really confused now?
From what I have found on line according to the Spanish tax band 19% tax is taken from 0 to 12450 euro and a pensioner age 65 would get an allowance of 6700 euro therefore 19% tax would be deducted from the balance of 2800 of a uk pension up to 12450, then anything from then on up to 20200 would be 24%.
Or do I have it wrong?
Thanks for the comments
Really confused now?
From what I have found on line according to the Spanish tax band 19% tax is taken from 0 to 12450 euro and a pensioner age 65 would get an allowance of 6700 euro therefore 19% tax would be deducted from the balance of 2800 of a uk pension up to 12450, then anything from then on up to 20200 would be 24%.
Or do I have it wrong?
Then you have a personal allowance Under 65 = 5.550€, 65-under 75 = 6.700€ and over 75 = 8.100€
Then you have an earned income allowance on a sliding scale, on earnings of up to 11.500 = 3.700€, earnings of 14.000 = 809€, earnings over 14.450 =nil
If you only have a UK pension you are unlikely to pay any tax in Spain, nor in UK
See the link to a worked tax example for a 2018 tax return
https://drive.google.com/file/d/1Jpx...Bvw9sZ4jC/view
Last edited by stevesainty; Mar 3rd 2019 at 8:16 pm. Reason: Inserting a link
Mar 3rd 2019, 9:30 pm
#13
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Re: Spanish income tax.
Everyone has a general tax allowance of 2,000€
Then you have a personal allowance Under 65 = 5.550€, 65-under 75 = 6.700€ and over 75 = 8.100€
Then you have an earned income allowance on a sliding scale, on earnings of up to 11.500 = 3.700€, earnings of 14.000 = 809€, earnings over 14.450 =nil
If you only have a UK pension you are unlikely to pay any tax in Spain, nor in UK
See the link to a worked tax example for a 2018 tax return
https://drive.google.com/file/d/1Jpx...Bvw9sZ4jC/view
Then you have a personal allowance Under 65 = 5.550€, 65-under 75 = 6.700€ and over 75 = 8.100€
Then you have an earned income allowance on a sliding scale, on earnings of up to 11.500 = 3.700€, earnings of 14.000 = 809€, earnings over 14.450 =nil
If you only have a UK pension you are unlikely to pay any tax in Spain, nor in UK
See the link to a worked tax example for a 2018 tax return
https://drive.google.com/file/d/1Jpx...Bvw9sZ4jC/view
Fred,
Thank you so much for the information, I need to start again I think. Your information will be very helpful.
I have a state pension and a small private pension so I will try to work it out with help of your info.
Once again thanks.
Last edited by Rosemary; Mar 3rd 2019 at 9:39 pm. Reason: corrected quote
Mar 4th 2019, 6:39 am
#14
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Re: Spanish income tax.
Everyone has a general tax allowance of 2,000€
Then you have a personal allowance Under 65 = 5.550€, 65-under 75 = 6.700€ and over 75 = 8.100€
Then you have an earned income allowance on a sliding scale, on earnings of up to 11.500 = 3.700€, earnings of 14.000 = 809€, earnings over 14.450 =nil
If you only have a UK pension you are unlikely to pay any tax in Spain, nor in UK
See the link to a worked tax example for a 2018 tax return
https://drive.google.com/file/d/1Jpx...Bvw9sZ4jC/view
Then you have a personal allowance Under 65 = 5.550€, 65-under 75 = 6.700€ and over 75 = 8.100€
Then you have an earned income allowance on a sliding scale, on earnings of up to 11.500 = 3.700€, earnings of 14.000 = 809€, earnings over 14.450 =nil
If you only have a UK pension you are unlikely to pay any tax in Spain, nor in UK
See the link to a worked tax example for a 2018 tax return
https://drive.google.com/file/d/1Jpx...Bvw9sZ4jC/view
Out of interesting, is a Draw down pension pot included on your return for wealt tax purposes?
Mar 4th 2019, 5:20 pm
#15
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Posts: 24
Re: Spanish income tax.
Everyone has a general tax allowance of 2,000€
Then you have a personal allowance Under 65 = 5.550€, 65-under 75 = 6.700€ and over 75 = 8.100€
Then you have an earned income allowance on a sliding scale, on earnings of up to 11.500 = 3.700€, earnings of 14.000 = 809€, earnings over 14.450 =nil
If you only have a UK pension you are unlikely to pay any tax in Spain, nor in UK
See the link to a worked tax example for a 2018 tax return
https://drive.google.com/file/d/1Jpx...Bvw9sZ4jC/view
Then you have a personal allowance Under 65 = 5.550€, 65-under 75 = 6.700€ and over 75 = 8.100€
Then you have an earned income allowance on a sliding scale, on earnings of up to 11.500 = 3.700€, earnings of 14.000 = 809€, earnings over 14.450 =nil
If you only have a UK pension you are unlikely to pay any tax in Spain, nor in UK
See the link to a worked tax example for a 2018 tax return
https://drive.google.com/file/d/1Jpx...Bvw9sZ4jC/view
And yes my forecast calculations (never having done one - hence a forecast) are materially different from yours
Why are the allowances (eg the 5,550) not reducing taxable income - or is it - that's just the way the calculation works in Spain
Last edited by uk03878; Mar 4th 2019 at 5:33 pm.