catsndogs

Hi does anyone receive a Forces Pension in Spain? Last year Hubby was taxed in Spain.Despite giving them a copy of the agreement between UK and Spain
that it is only to be taxed in U.K, they taxed him anyway and then had to claim from UK tax office. this year the same thing has happened.
Any help would be good Thanks

Fred James

Forces pensions are only taxed in the UK but they have to be declared on your Spanish tax declaration.They are not taxed directly in Spain but they may affect the tax you pay on any other worldwide income such a savings interest and the UK state pension. If it does result in an increase in your Spanish tax, you cannot reclaim it from the UK. If you were taxed directly on it, it was a mistake and needs to be rectified with the Spanish tax office - it is not something that HMRC will be interested in.

bobd22

Just done mine explained it to the gestor who fully understood it. Military pension declared to Spain but not taxed at all in Spain. My tax bill was very small I paid tax on UK savings interest and state pension.

EsuriJohn

If the only other income in addition to your GOVERNMENT Pension is a basic state pension and you are of UK STATE Pension age you may not pay tax in Spain taking into account the allowance Spain gives against earned income which is where a state pension is categorised in Spain.

bobd22

To be fair the amount of tax I've paid to Spain given it includes interest from savings etc it isnt worth losing sleep over. I have 2 government pensions and had my state pension been added to them for tax I would be much worse off.

catsndogs

Thank you all for replies but all sorted

davethedog

Interested in this as the wife and I are considering getting Spanish residencia in Gran Canaria and we both receive UK Forces pensions, that we know are not directly taxed in Spain and would also be receiving rental income from a UK property that we would not be taxed on either as taxed in the UK and the income from it does not cross the taxable threshold in Spain after UK tax is paid etc

lurchio

Its not automatic re: Forces Pensions. You need to obtain the Double taxation treaty forms from your tax advisor (two sets : one in Spanish and one in English) submit them to Hacienda and when they return with your evidence of Spanish tax residency, you send the English forms and a copy of your Spanish tax residency official form to HMRC and then the left hand knows what the right is doing.

The forces pension is then taxed in the UK against a more generous UK allowance and declared in Spain . You will not pay tax twice on the same income , but the pension will count against your allowance in Spain. Happy days!

Lynn R

You don't need to obtain the Double Taxation form from your tax advisor, you can simply download it from the HMRC website.

http://www.hmrc.gov.uk/gds/paye/atta...pain_indiv.pdf

I completed it myself, just went to the main Agencia Tributaria office in Málaga (my local one said it had to be dealt with at provincial level and they could not do it there). I handed it in at their Registro General desk, they gave me a printed receipt for it, and a week later I received the Certificado de Residencia Fiscal en España (Convenio) by post, to send to HMRC with the English version of the Double Taxation form. Very easy to do.

Fred James

I don’t understand why you need to get HMRC involved. Your government pension is taxed automatically in the UK and all you need to do is declare it on your tax declaration in Spain as exempt income. That ensures that the tax on your other income is taxed taking into account the exempt income.

It should be that simple - unless I am missing something. Box 525 on the tax declaration if I remember correctly.

lurchio

Thank you, Fred, interesting! Can only say my field is Engineering and so took the advice of my tax advisor who said it was mandatory as I was to be a Spanish Tax resident and did it. My wife also did, but she has a Civil Service and NHS pension, the former is taxed in the UK, the latter here as it was that 'type' of NHS pension. We more or less get a rebate here every year, but believe this is little to do with the DTT, more to do with banking etc.

bobd22

When I moved here full time I contacted DHSS and informed them I was moving here and would be tax resident etc. At the time I discussed with them situation re my 2 government pensions which I was drawing and situation when eventually drew state pension. As has been mentioned I was told my government pensions would continue to be taxed in UK by means of PAYE and nothing would change with them. They told me I should declare them to Spain but not pay tax. My state pension should be declared and along with UK savings interest etc be taxed in Spain. I then did receive a form from them which I completed and returned not sure if its the double tax treaty form but certainly from memory some questions are the same. Here I spoke to local gestor who said the same. I gave him the information. Ten days later I returned he told me what tax I had to pay in 2 instalments (not very much) and gave me a copy of hacienda forms detailing it. I left a happy and contended man and can sleep at night without any worries.

Fred James

The procedure you described is when you have a UK State pension and you want it paid gross in Spain rather than be taxed in UK. There used to be a relatively simple procedure where you downloaded a form from HMRC, filled in dedails of the pension you wanted be be exempted. You took it to the Spanish tax office and they stamped it and sent it back to HMRC. It's a bit different now as you have to wait until you have been taxed on it here - or something like that!

Lynn R

I had to submit the Double Taxation form to HMRC as they were taxing me on other occupational pension income as well as on my Civil Service pension. I now have an NT tax code applied to my larger occupational pension and the UK personal alllowance tax code set against the Civil Service one. When I start to receive my state pension , I understand that I will have to submit a new one as the state pension wasn't included on the original one (and I will need to have declared the state pension in Spain before I can do that).

My Civil Service pension is declared in Spain as renta exenta, in box 0525 of the Declaracion, as Fred said.

Notdunroamin

Something not right, HMRC would not reimburse tax in that way.

If it's payable in UK thats the end of the matter, if you've been erroneously double taxed elsewhere thats your problem not theirs.

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