Spanish tax

Old Jun 30th 2022, 8:39 am
  #1  
Just Joined
Thread Starter
 
Joined: Jun 2022
Posts: 3
Martin Nash is an unknown quantity at this point
Default Spanish tax

Hi Everybody,
I am looking at the possibility of moving to Spain in around 4 years. Could someone please help me with a question? That being that once you move to Spain do you pay tax on your state pension + private pension?
I am confused after reading this on the website especially as you will already pay tax on your private pension in the UK.
I look forward to any reply.

Many thanks,

Martin
Martin Nash is offline  
Old Jun 30th 2022, 9:11 am
  #2  
BE Enthusiast
 
Joined: Sep 2019
Posts: 654
Listen Very Carefully has a reputation beyond reputeListen Very Carefully has a reputation beyond reputeListen Very Carefully has a reputation beyond reputeListen Very Carefully has a reputation beyond reputeListen Very Carefully has a reputation beyond reputeListen Very Carefully has a reputation beyond reputeListen Very Carefully has a reputation beyond reputeListen Very Carefully has a reputation beyond reputeListen Very Carefully has a reputation beyond reputeListen Very Carefully has a reputation beyond reputeListen Very Carefully has a reputation beyond repute
Default Re: Spanish tax

How pensions are taxed is covered by the Tax agreement between different countries.The general rule that is adopted in most tax agreements is that all pensions EXCEPT government occupational pensions eg police fire teachers etc, are taxed in the country in which you are resident.This means that if you move to Spain then you will have to arrange with HMRC to get your pensions paid free of tax and you will then have to declare them and any other income to the Spanish tax authorities
I am sure that a Spanish expat will be along in a minute to tell you how you achieve this .In France you print off a bi lingual form and get the French tax authorities to confirm that you are a tax resident and you send it to HMRC
Listen Very Carefully is offline  
Old Jun 30th 2022, 9:52 am
  #3  
Just Joined
Thread Starter
 
Joined: Jun 2022
Posts: 3
Martin Nash is an unknown quantity at this point
Default Re: Spanish tax

Many thanks for your reply, unfortunately this doesn't quite give me the answer needed but much appreciated.

Many thanks,

Martin
Martin Nash is offline  
Old Jun 30th 2022, 10:09 am
  #4  
Lost in BE Cyberspace
 
Joined: Feb 2013
Posts: 6,148
Moses2013 has a reputation beyond reputeMoses2013 has a reputation beyond reputeMoses2013 has a reputation beyond reputeMoses2013 has a reputation beyond reputeMoses2013 has a reputation beyond reputeMoses2013 has a reputation beyond reputeMoses2013 has a reputation beyond reputeMoses2013 has a reputation beyond reputeMoses2013 has a reputation beyond reputeMoses2013 has a reputation beyond reputeMoses2013 has a reputation beyond repute
Default Re: Spanish tax

Some clear information here: https://www.spenceclarke.com/article...not-a-pension/Because in some cases pensions paid from other countries can be either:
  • Completely exempt from tax in Spain
  • Partially exempt from tax in Spain
  • Subject to the lower tax rates than usually applies
  • Be treated as investments with the cost of contributions deductible from income received.
Let’s first remember that being a Spanish resident means that you are subject to Spanish income tax on all your worldwide income.
Moses2013 is offline  
Old Jun 30th 2022, 10:12 am
  #5  
BE Forum Addict
 
Loafing Along's Avatar
 
Joined: Jan 2016
Posts: 2,320
Loafing Along has a reputation beyond reputeLoafing Along has a reputation beyond reputeLoafing Along has a reputation beyond reputeLoafing Along has a reputation beyond reputeLoafing Along has a reputation beyond reputeLoafing Along has a reputation beyond reputeLoafing Along has a reputation beyond reputeLoafing Along has a reputation beyond reputeLoafing Along has a reputation beyond reputeLoafing Along has a reputation beyond reputeLoafing Along has a reputation beyond repute
Default Re: Spanish tax

Originally Posted by Martin Nash
Hi Everybody,
I am looking at the possibility of moving to Spain in around 4 years. Could someone please help me with a question? That being that once you move to Spain do you pay tax on your state pension + private pension?
I am confused after reading this on the website especially as you will already pay tax on your private pension in the UK.
I look forward to any reply.

Many thanks,

Martin
The simple answer is "Yes" - Spain taxes your worldwide income. Once resident you need to submit to UK tax authorities a Double taxation relief form which, if completed correctly, will suspend UK tax on your state and private pension . You then declare this income in Spain and it will be taxed here.
Loafing Along is offline  
Old Jun 30th 2022, 10:43 am
  #6  
BE Forum Addict
 
Joined: Jul 2012
Posts: 1,013
Barriej has a reputation beyond reputeBarriej has a reputation beyond reputeBarriej has a reputation beyond reputeBarriej has a reputation beyond reputeBarriej has a reputation beyond reputeBarriej has a reputation beyond reputeBarriej has a reputation beyond reputeBarriej has a reputation beyond reputeBarriej has a reputation beyond reputeBarriej has a reputation beyond reputeBarriej has a reputation beyond repute
Default Re: Spanish tax

Originally Posted by Loafing Along
The simple answer is "Yes" - Spain taxes your worldwide income. Once resident you need to submit to UK tax authorities a Double taxation relief form which, if completed correctly, will suspend UK tax on your state and private pension . You then declare this income in Spain and it will be taxed here.
Yep, but getting the Spanish authorities to complete their bit is a nightmare.
Ive been waiting months as its the Spanish end that has to be done first (according to the accountant). You have to prove you are liable for taxes in one country (i.e. supply proof of a tax return etc) and then this form gets sent to the Uk and they will give a zero code.

Im now paying Uk tax on a private pension, which with filing as a couple here would be tax free.
Add to the fact that my pension company issue P60 in July we will have to guesstimate (but not be able to prove tax paid) in the Uk when I file next year...

And to the OP tax year in Spain is Jan to Dec unlike the Uk.
Barriej is offline  
Old Jun 30th 2022, 10:55 am
  #7  
Lost in BE Cyberspace
 
Joined: Feb 2008
Posts: 5,621
bobd22 has a reputation beyond reputebobd22 has a reputation beyond reputebobd22 has a reputation beyond reputebobd22 has a reputation beyond reputebobd22 has a reputation beyond reputebobd22 has a reputation beyond reputebobd22 has a reputation beyond reputebobd22 has a reputation beyond reputebobd22 has a reputation beyond reputebobd22 has a reputation beyond reputebobd22 has a reputation beyond repute
Default Re: Spanish tax

When I first moved here 4 years ago I was not UK state pension age but was in receipt of crown pension. When I applied for my State pension I was told I could have it paid gross to my Spanish bank account and declare it in Spain for tax. That's what I did. I pay UK tax on my crown pension and income from a UK property rented out. I do my annual tax declaration in Spain declaring my UK State pension interest from savings premium bond winnings etc. I also tell them about my Crown Pension and and income from UK property rental but that it is taxed in the UK. Gestor said that's what I needed to do so I declare the amount i get from crown pension and UK rental income to Spain but I do not pay Spanish tax on it. As I have a UK property that I rent out I have to do a UK tax return and inform them of all income I declare in Spain. It has worked fine for me and I actually end up paying less tax on my UK state pension than if it was taxed in the UK. I just put my last Spanish tax return in yesterday and as it's now joint with my wife who currently has no income or pension to declare in Spain our joint declaration worked in my favour. I understand that you can if you wish actually choose to have your UK state pension paid and taxed in the UK I thought it had to be taxed in Spain but I think it's either or but you shouldn't pay tax twice on income.
bobd22 is offline  
Old Jun 30th 2022, 1:02 pm
  #8  
BE Forum Addict
 
Joined: Aug 2009
Location: Costa Blanca
Posts: 3,143
spainrico has a reputation beyond reputespainrico has a reputation beyond reputespainrico has a reputation beyond reputespainrico has a reputation beyond reputespainrico has a reputation beyond reputespainrico has a reputation beyond reputespainrico has a reputation beyond reputespainrico has a reputation beyond reputespainrico has a reputation beyond reputespainrico has a reputation beyond reputespainrico has a reputation beyond repute
Default Re: Spanish tax



What income is taxed?

If you are a resident in Spain, you will be taxed for your worldwide income and will be obliged to file income tax returns.
  • Earnings from work (wages, salaries, pensions, unemployment income, etc.)
  • Earnings from liquid capital (share dividends, account interests, etc.) and from real estate capital (from the leasing of real estate, etc.)
  • Earnings from economic activities (employers, professionals, etc.)
  • Net gains and capital gains loss (by transfer of goods, some prizes, etc.)
  • Legally established allocations on income from the ownership of some properties, other than the home that is leased, etc
  • Government grants (if any).
Also:-
https://www.gov.uk/guidance/living-in-spain#tax
spainrico is offline  
Old Jun 30th 2022, 1:12 pm
  #9  
BE Enthusiast
 
Joined: May 2019
Posts: 640
Ronnyone has a reputation beyond reputeRonnyone has a reputation beyond reputeRonnyone has a reputation beyond reputeRonnyone has a reputation beyond reputeRonnyone has a reputation beyond reputeRonnyone has a reputation beyond reputeRonnyone has a reputation beyond reputeRonnyone has a reputation beyond reputeRonnyone has a reputation beyond reputeRonnyone has a reputation beyond reputeRonnyone has a reputation beyond repute
Default Re: Spanish tax

The key thing for the OP to start with is as folk have said about worldwide assests plus it is important to realise that many non-taxable saving schemes ( ISA, Premium Bond, etc) are taxable in Spain. The same goes for gifts between spouses. Also there are no generous personal allowances etc. All in all anyone who has various assets in the uk that are designed to take advantage of UK system need tobe aware that in Spain few of these things exist and therefore wealth tends to be spent quickly here and not stored for a rainy day.
Ronnyone is offline  
Old Jun 30th 2022, 1:39 pm
  #10  
BE Enthusiast
 
Joined: Sep 2019
Posts: 654
Listen Very Carefully has a reputation beyond reputeListen Very Carefully has a reputation beyond reputeListen Very Carefully has a reputation beyond reputeListen Very Carefully has a reputation beyond reputeListen Very Carefully has a reputation beyond reputeListen Very Carefully has a reputation beyond reputeListen Very Carefully has a reputation beyond reputeListen Very Carefully has a reputation beyond reputeListen Very Carefully has a reputation beyond reputeListen Very Carefully has a reputation beyond reputeListen Very Carefully has a reputation beyond repute
Default Re: Spanish tax

I thought my answer was quite clear.It clearly states what pensions are taxed where,which is what the OP asked
Listen Very Carefully is offline  
Old Jun 30th 2022, 1:59 pm
  #11  
Lost in BE Cyberspace
 
Joined: Feb 2008
Posts: 5,621
bobd22 has a reputation beyond reputebobd22 has a reputation beyond reputebobd22 has a reputation beyond reputebobd22 has a reputation beyond reputebobd22 has a reputation beyond reputebobd22 has a reputation beyond reputebobd22 has a reputation beyond reputebobd22 has a reputation beyond reputebobd22 has a reputation beyond reputebobd22 has a reputation beyond reputebobd22 has a reputation beyond repute
Default Re: Spanish tax

Originally Posted by spainrico



What income is taxed?

If you are a resident in Spain, you will be taxed for your worldwide income and will be obliged to file income tax returns.
  • Earnings from work (wages, salaries, pensions, unemployment income, etc.)
  • Earnings from liquid capital (share dividends, account interests, etc.) and from real estate capital (from the leasing of real estate, etc.)
  • Earnings from economic activities (employers, professionals, etc.)
  • Net gains and capital gains loss (by transfer of goods, some prizes, etc.)
  • Legally established allocations on income from the ownership of some properties, other than the home that is leased, etc
  • Government grants (if any).
Also:-
That is exactly what I do however although you must declare the worldwide assett , in my case rental income from our uk property, that does not per say mean Spain will tax that asset. In my case it's declared on my tax declaration so they are aware of it and how much income is generated, however the tax is paid in the UK and Spanish authorities are happy with that. Main thing is declare and say if tax paid to UK the authorities then decide if you don't declare it then that is where problems will occur. That was the advice I was given by my Gestor and when I contacted HMRC. I did fill in a form informing HMRC when I moved here full time but what that was I can't remember, HMRC sent me the form I completed it so far I have had no issues
bobd22 is offline  
Old Jun 30th 2022, 2:24 pm
  #12  
DLC
BE Forum Addict
 
Joined: Jun 2011
Posts: 1,153
DLC has a reputation beyond reputeDLC has a reputation beyond reputeDLC has a reputation beyond reputeDLC has a reputation beyond reputeDLC has a reputation beyond reputeDLC has a reputation beyond reputeDLC has a reputation beyond reputeDLC has a reputation beyond reputeDLC has a reputation beyond reputeDLC has a reputation beyond reputeDLC has a reputation beyond repute
Default Re: Spanish tax

If you use Modelo 030 to register as a tax resident in Spain, then ask for a certificado de residencia fiscal, translate it if necessary, and show that to Inland Revenue, wouldn't that be enough proof for the Inland Revenue to show you're a tax resident in Spain?
DLC is offline  
Old Jun 30th 2022, 2:45 pm
  #13  
BE Enthusiast
 
Joined: Jun 2017
Location: Alicante
Posts: 928
Notdunroamin has a reputation beyond reputeNotdunroamin has a reputation beyond reputeNotdunroamin has a reputation beyond reputeNotdunroamin has a reputation beyond reputeNotdunroamin has a reputation beyond reputeNotdunroamin has a reputation beyond reputeNotdunroamin has a reputation beyond reputeNotdunroamin has a reputation beyond reputeNotdunroamin has a reputation beyond reputeNotdunroamin has a reputation beyond reputeNotdunroamin has a reputation beyond repute
Default Re: Spanish tax

.
Originally Posted by bobd22
I declare the amount i get from crown pension and UK rental income to Spain but I do not pay Spanish tax on it.

Actually you may, albeit indirectly, because your gross income - which is what you are declaring - can elevate you into a higher tax band generating a larger tax bill even after discounting what has already been paid in the UK

I understand that you can if you wish actually choose to have your UK state pension paid and taxed in the UK I thought it had to be taxed in Spain but I think it's either or but you shouldn't pay tax twice on income.

Where you pay tax is never a matter of personal choice, it is always determined by indivdual circumstances.

True you shouldn't pay tax twice on the same money but during the crossover period it's very likely that you will although anything you pay in UK which wasn't necessary will in due course be refunded by HMRC.

The R85 'Spain Individual' is the form which you need and sometimes the Spanish tax man can be persuaded to stamp and authorise it and issue you with a TIN (Tax Identification Number) before you have submitted a tax return but if not you will have to wait for it to make it's way through the system and then HMRC to act upon it which may not be before the end of the current UK tax year which means it's possible to wait for up to two years for it.
Notdunroamin is offline  
Old Jun 30th 2022, 2:54 pm
  #14  
BE Forum Addict
 
Joined: Aug 2006
Location: Velez-Malaga
Posts: 4,917
Lynn R has a reputation beyond reputeLynn R has a reputation beyond reputeLynn R has a reputation beyond reputeLynn R has a reputation beyond reputeLynn R has a reputation beyond reputeLynn R has a reputation beyond reputeLynn R has a reputation beyond reputeLynn R has a reputation beyond reputeLynn R has a reputation beyond reputeLynn R has a reputation beyond reputeLynn R has a reputation beyond repute
Default Re: Spanish tax

Originally Posted by Barriej
Yep, but getting the Spanish authorities to complete their bit is a nightmare.
Ive been waiting months as its the Spanish end that has to be done first (according to the accountant). You have to prove you are liable for taxes in one country (i.e. supply proof of a tax return etc) and then this form gets sent to the Uk and they will give a zero code.

Im now paying Uk tax on a private pension, which with filing as a couple here would be tax free.
Add to the fact that my pension company issue P60 in July we will have to guesstimate (but not be able to prove tax paid) in the Uk when I file next year...

And to the OP tax year in Spain is Jan to Dec unlike the Uk.
Your accountant's advice accords with what I did. Once I had submitted Spanish tax returns on my workplace pensions (one which is not a Crown Pension and fully taxable in Spain, and one Civil Service pension which has to be declared on my Spanish tax return as exempt income) I downloaded the Spain Individual Double Taxation Form from the HMRC website. It comes in two versions, one in Spanish and one in English so is easy to complete even if someone doesn't speak Spanish as the questions mirror each other so just complete the English version first then copy the information in the Spanish version. I was advised by my local Hacienda office that they could not deal with it and it would have to be dealt with at the main provincial AEAT office in Malaga, so I dropped it off there whilst on a shopping trip, got it entered into the registry and a stamped receipt for it. The Cerrtificado de Residencia Fiscal en Espana (Convenio) arrived in the post at my home address one week later and I then sent that to HMRC together with the English version of the double taxation form, and several weeks later received a refund of the tax paid in the UK on the workplace pension. They then allocated me an NT tax code on the workplace pension so I have not paid any further UK tax on that.

There is another kind of Certificado de Residencia Fiscal en Espana (the one a Spanish resident would need if they were selling their property in order not to have the 3% retention for Capital Gains Tax witheld, for example) but that is not the one required for double taxation purposes.

Last edited by Lynn R; Jun 30th 2022 at 3:17 pm.
Lynn R is offline  
Old Jun 30th 2022, 3:03 pm
  #15  
BE Forum Addict
 
Joined: Jul 2012
Posts: 1,013
Barriej has a reputation beyond reputeBarriej has a reputation beyond reputeBarriej has a reputation beyond reputeBarriej has a reputation beyond reputeBarriej has a reputation beyond reputeBarriej has a reputation beyond reputeBarriej has a reputation beyond reputeBarriej has a reputation beyond reputeBarriej has a reputation beyond reputeBarriej has a reputation beyond reputeBarriej has a reputation beyond repute
Default Re: Spanish tax

Originally Posted by DLC
If you use Modelo 030 to register as a tax resident in Spain, then ask for a certificado de residencia fiscal, translate it if necessary, and show that to Inland Revenue, wouldn't that be enough proof for the Inland Revenue to show you're a tax resident in Spain?
Yep but its not that cut and dried.
I spoke to the firm doing ours and they have stated that a tax return needs to have been filled and then actioned by the tax man here, before they will agree and issue the cert.
Its not just a case of declaring you will pay, you have actually now got to file the first time and get into the system.

Unlike the Uk where you just do the old Gov Gateway thing and tell them you want to pay tax..
Spain as we all know just aint that joined up...

And when you setup your bank account as a non resident, when you change it over to a resident one, you now have to ensure that the bank have your TIE as proof of ID and they remove your passport from the system.
Otherwise the digital signature and your bank details that the taxman gets wont tally up, as they use the TIE as your identification document once resident.

We had to do all this earlier in the year so we could present the first returns..
Barriej is offline  

Contact Us - Archive - Advertising - Cookie Policy - Privacy Statement - Terms of Service -

Copyright © 2024 MH Sub I, LLC dba Internet Brands. All rights reserved. Use of this site indicates your consent to the Terms of Use.