Spanish tax

Old Jan 21st 2023, 2:36 pm
  #46  
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Default Re: Spanish tax

Yes my UK state pension has pushed me into having to make higher tax payments but as Lynn R correctly says taking things in the round with lower utilities and lower IBI (which has not changed for years) we can't complain (but we still will because once a Brit....)
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Old Jan 21st 2023, 2:37 pm
  #47  
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Default Re: Spanish tax

Originally Posted by 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.
Unless you became a Spanish citizen, in which case I think Article 18 Paragraph 2b of the double taxation treaty would apply.
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Old Jan 21st 2023, 2:40 pm
  #48  
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Default Re: Spanish tax

Originally Posted by 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.
I wasn't aware it was always the case as not resident at that time. I knew there was a change and that one should now declare their Crown pension all be it not taxed in Spain. I have a military and police pension both of which to date are accepted by gestor and hacienda as crown pension taxed in the UK along with income from a UK property rented.
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Old Jan 21st 2023, 2:41 pm
  #49  
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Default Re: Spanish tax

Originally Posted by spainrico
Yes my UK state pension has pushed me into having to make higher tax payments but as Lynn R correctly says taking things in the round with lower utilities and lower IBI (which has not changed for years) we can't complain (but we still will because once a Brit....)
My IBI bill actually went down a tiny bit last year, and will do the same this year and in 2024.
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Old Jan 21st 2023, 2:49 pm
  #50  
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Default Re: Spanish tax

Originally Posted by Red Eric
Unless you became a Spanish citizen, in which case I think Article 18 Paragraph 2b of the double taxation treaty would apply.
Very possibly? I was referring to those resident in Spain or elsewhere but UK citizen like myself.
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Old Jan 21st 2023, 2:54 pm
  #51  
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Default Re: Spanish tax

Originally Posted by 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.
This may be of use for those ex military with a military pension which defines them as Crown Pensions. Interesting couple of exceptions
https://forcespensionsociety.org/202...ving-abroad-2/
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Old Jan 21st 2023, 6:12 pm
  #52  
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Default Re: Spanish tax

Originally Posted by bobd22
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.
No reason it should.

She can do her own tax return and pay no tax and if you do yours your tax will not materially change.

Sounds like your gestor may not know what he/she is doing, you'd be surprised how many don't but of course you'll never know - unless the tax man comes calling and then it's on you not your gestor!
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Old Jan 21st 2023, 6:40 pm
  #53  
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Default Re: Spanish tax

Originally Posted by Notdunroamin
No reason it should.

She can do her own tax return and pay no tax and if you do yours your tax will not materially change.

Sounds like your gestor may not know what he/she is doing, you'd be surprised how many don't but of course you'll never know - unless the tax man comes calling and then it's on you not your gestor!
My understanding is because he puts it through as 2 individual returns and then as a couple to see which is best option. This year neither of us paid tax as joint return with wife having no income. Or we could have done 2 seperate returns and I would then have paid tax?
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Old Jan 21st 2023, 7:30 pm
  #54  
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Default Re: Spanish tax

Originally Posted by bobd22
My understanding is because he puts it through as 2 individual returns and then as a couple to see which is best option. This year neither of us paid tax as joint return with wife having no income. Or we could have done 2 seperate returns and I would then have paid tax?
A competent gestor will try out both - joint and separate submission, and will use the one that yields the least overall amount of tax.
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Old Jan 21st 2023, 7:44 pm
  #55  
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Default Re: Spanish tax

Originally Posted by Joppa
A competent gestor will try out both - joint and separate submission, and will use the one that yields the least overall amount of tax.
Exactly so once my wife gets her pension she will use up her part of the allowance and we will probably be better off doing seperate returns. Currently she uses nothing really her savings interest is a few pounds at best and she has no other income.
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Old Jan 21st 2023, 10:37 pm
  #56  
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Default Re: Spanish tax

Originally Posted by Notdunroamin
No reason it should.

She can do her own tax return and pay no tax and if you do yours your tax will not materially change.

Sounds like your gestor may not know what he/she is doing, you'd be surprised how many don't but of course you'll never know - unless the tax man comes calling and then it's on you not your gestor!
If they submit a joint return as his wife has no income then an additional 3,400 from his wife's unused personal allowance is added to his own allowances. So when his wife starts to receive her pension she will use up her allowance and the allowances Bob gets will reduce by 3,400. So obviously hid tax liability will increase

By the way, if you use thr frèe service provided by Hacienda to make an appointment at one of their offices and have them complete your tax return for nothing, they also show you the comparison between a joint return and individual ones so you can decide which is best for you. They're very helpful and you don't have to take along any documents or statements to prove your income figures. Of course you'd have to be in a position to justify your figures should they be queried at a later date.
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Old Jan 21st 2023, 11:26 pm
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Default Re: Spanish tax

Originally Posted by Lynn R
If they submit a joint return as his wife has no income then an additional 3,400 from his wife's unused personal allowance is added to his own allowances. So when his wife starts to receive her pension she will use up her allowance and the allowances Bob gets will reduce by 3,400. So obviously hid tax liability will increase

By the way, if you use thr frèe service provided by Hacienda to make an appointment at one of their offices and have them complete your tax return for nothing, they also show you the comparison between a joint return and individual ones so you can decide which is best for you. They're very helpful and you don't have to take along any documents or statements to prove your income figures. Of course you'd have to be in a position to justify your figures should they be queried at a later date.
Thanks Lynn you confirm my understanding of it.
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Old Jan 22nd 2023, 8:00 pm
  #58  
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Default Re: Spanish tax

Thanks very much Spainrico, that is very useful to know.

Did you have to fill in the "FD9 form" -or its current equivalent- several times, one for each pension that you claimed? Or was it the case that once you sent off the form once for a particular pension, later on it was valid for all the other pensions that you might have?... sorry, what I mean is... one FD9 form enough for "all" pensions? or one FD9 form needed for "each" pension? Thanks a lot for the clarification! Kind regards.
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Old Jan 22nd 2023, 8:09 pm
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Default Re: Spanish tax

Originally Posted by 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.
Thanks very much for the explanation bobd22, very useful to know. Could you please clarify this? So you have your "crown pension" taxed only in the UK, but still you need to declare this "crown pension" on the "Spanish tax return" in Spain, indicating how much money received (gross) and how much UK tax was deducted (net). Have I understood it correctly? Many thanks indeed. And also, would you mind sharing the name of your gestor (as he sounds knowledgeable about this type of things)? I have already asked a few gestors in Spain but they do not seem to understand what I am talking about.regarding "UK civil service pensions"..! Many thanks. Best regards to all.
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Old Jan 22nd 2023, 8:11 pm
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Default Re: Spanish tax

Originally Posted by 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..
Thanks very much Barriej, for clarifying about the forms, I am very glad that we do not need to repeat "the whole thing" every 5 years! Best regards.
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