DLC

The first barrier against pensions uplift when the person is living abroad is not having a reciprocal social security treaty, which makes little sense when a UK pension is a payment by the British government to someone who was resident in the UK and paid into the UK pension pot. The second barrier is "well, we still don't want to anyway" in the case of Canada and New Zealand which does have a reciprocal social security treaty.

Other countries just pay the pension and uprate it yearly with no fuss or trying to implicate the other country as somehow involved. Maybe it will become an issue when votes from British citizens who have been resident abroad for more than 15 years are allowed.

anagerbera2014

Very useful, thank you Lynn.

spainrico

Patrick is entirely correct - my Aviva pension (and my UK state pension) are paid into my UK account gross ie no tax deducted because my UK tax code is NT (NO tax) because they are declared in Spain via the annual declaration de renta (tax return) because I am fiscally resident in Spain.

BTW - useful Spanish tax guide for free here

https://www.pellicerheredia.com/en/open-library/

anagerbera2014

Many many thanks, Spainrico, for the clarification.

1) So, this form, FD9 is not valid any more?

2) And we should use: https://assets.publishing.service.go..._Indiviual.pdf
... is that correct? - However, according to Lynn before (thanks very much Lynn as well), this form should have a part in "English" and another part in "Spanish", and I do not see the part in "Spanish". Could you clarify if it is needed/not needed any more?

3) I am attaching a link that might be useful for all, https://webarchive.nationalarchives....ide-note-8.htm . It says that you have to "resend" this type of forms (asking for UK tax relief) every 5 years to the UK Tax Authorities. Does anyone know if that is true? Or is it that once you request not to be taxed on your "UK state pension", then the request is valid "for ever"?

Thanks a lot to everyone who contributed to this forum... it is very important to know the facts!

Kind regards.

anagerbera2014

Thanks a lot for the comment, Spainrico, and also for the link to the information guides, they are very good indeed! Best regards.

spainrico

Glad you found them useful....

I actually went through the process years ago via FD9 - I was recently researching it for some neighbours who are at the point of needing to do it.

From what I can see the Spain individual form is a much slimmed-down FD9 and does not contain a Spanish language portion.

You need to do a Spanish declaration de renta (tax return) to get into the Spanish tax system to prove to the UK that you are indeed fiscally resident in Spain.

Since my original FD9 submission a very long time ago I have never communicated with UK Tax office nor they with me (perfect!!) so my NT (No Tax) tax code stands and my pensions are paid gross of tax in the UK.

People with UK government pensions have to pay UK tax (but benefit from allowances in b both Uk and Spain)

Barriej

1. That's correct. You have to continue paying uk tax until you have put your first return in to Spain. You then ask for a fiscal cert and when they finally get it to you, it can then be sent with form (can't remember the number) to the uk. You will then get an nt code and any tax will be repaid...
The good old UK will only accept this form via post, not direct or even via your government gateway account.
The rebate will come by cheque as well.

Oh keep the nt coding page (which will be sent seperatly from the forms they will return). You should give the nt form to the tax man here when you do your next return....

2. Nope its just in English as you now do it the way I said in no 1.

3. Can't answer that but the letter I got from my private pension company said it would pay my pension tax free from x date until otherwise notified. I'd take that as a no to 5 years..

bobd22

is that correct ? . My understanding is that they changed that around 2015. What you say used to be the case but since that change government pensions are still taxed in the UK with UK allowance. Spain takes into account what you have earned including the UK Government pension for your Spanish allowance but doesn't tax you on the Government Pension. Pre the change around 2015 you didn't need to mention the Government pension so as you describe got 2 tax allowances. That is why now those with government/crown pensions must declare the pensions to Spain.

spainrico

Sorry, my post could have been better worded - and maybe given it does not apply to me I should not have commented - but as a friend who is in this situation who was talking about it the other day I added the comment.

Yes, you are right (I think) but as I understand it these people do benefit from UK and Spain tax allowances - whereas I have to declare my total income in Spain and only have (low) Spanish tax allowances applied.

bobd22

Yes those of us with Crown pensions do have the benefit of higher UK tax allowance on our Crown pension. That being said if the tax allowance was better in our country of residence then we would loose out. So it's swings and roundabouts as we have no choice where we pay the tax on our Crown Pension it has to be paid in the UK.

spainrico

Yes I take your point - my comments were based on living in Spain where I think (including me) UK Expats generally consider the allowances on the low side (without all the add ons ie big families....etc which typically do n to apply to many of us 'mature' expats)

Anyway, it is what it is - and as I always say - if you don't like it don't stay here!

bobd22

Very true. I do seem to remember reading some time back that for those with Crown Pensions resident in Cyprus for some reason they can choose to pay tax on the Crown Pension either in Cyprus or the UK whichever is benificial? It was some time back that I read that and don't know why that should be as I'm not aware of other countries one can do this. Possibly because it was British territory but then same woukd apply to certain other countries? Only unique thing I know about Cyprus is it retains Sovereign Base areas for Army and RAF camps and land. In effect still British land. All part of the treaty on Cyprus becoming independant, maybe that is something to do with it? To be honest I declare all my income to Spain including Crown Pension UK property rental income which is taxed in Spain, state pension savings interest premium bond winnings etc. I still think I end up benefitting on amount of tax I pay them than if my state pension was taxed in the UK. However our gestor says my own tax will increase when my wife gets her state pension as currently she has no income in Spain other than very small amount of savings interest that she declares. It is what it is declare fully pay what they say and sleep at night is my belief.

bobd22

Just looked up the Cyprus tax on Crown Pensions, they withdrew the option to choose to pay tax in Cyprus in 2019. Other than for those already resident and doing so they can continue to pay it in Cyprus untill 2024. So like other Crown/Government holders tax on the pension must be paid to UK.

Lynn R

I think the tax situation for people on lower incomes in Spain improved a lot in recent years. From this year those earning €15k or less will pay no tax, so that's slightly higher allowances than the UK. A pensioner couple with pensions of €15k each so a total household income of €30k (and I think most people could live quite comfortably on that) would not pay any tax. However, as we all know (unless they had substantial savings) the income requirements needed to obtain a non lucrative visa since Brexit preclude UK citizens in that position from being able to live here.

On the other hand, from this year on I'll be paying double the amount of income tax I'd pay if I lived in the UK, since getting my state pension takes me well over the threshold to be eligible for the low income allowance. However, I prefer living here and the difference in things like Council Tax and utility bills offsets most if not all the tax bill.

Fred James

That is not stricktly true. It has always been the case that UK government pensions should be taken into account, but because of some conflicting advice from one senior tax official, nobody bothered to declare it. When the UK/Spain tax treaty was revised a few years ago, the requirement to declare it was more clearly defined.

That said, there still remains some confusion with gestors and even tax officials being unaware of the rules. A friend of mine (with a UK police pension), was told categorically that the only UK government pensions that this rule applied to were police pensions. That is clearly wrong, but it does prove that even at that level, there are still misunderstandings. The best solution is to do your own declaration, correctly, online.