Tax question

Old Mar 19th 2018, 9:39 pm
  #1  
Forum Regular
Thread Starter
 
Joined: Oct 2017
Posts: 34
Kevo11 is an unknown quantity at this point
Default Tax question

Evening all.

Can someone please confirm if my understanding below is correct? Thanks.

Moving to Spain in May ish. Will not be working, age 52. Any private pension income that I drawdown from the UK will be taxed in Spain. I believe the rate will be 19% on income above the personal allowance of €5,550 up to €12,450. Or am I talking nonsense?
Kevo11 is offline  
Old Mar 20th 2018, 9:42 am
  #2  
BE Enthusiast
 
stevesainty's Avatar
 
Joined: Jan 2011
Location: Torrevieja Costa Blanca South
Posts: 376
stevesainty has a reputation beyond reputestevesainty has a reputation beyond reputestevesainty has a reputation beyond reputestevesainty has a reputation beyond reputestevesainty has a reputation beyond reputestevesainty has a reputation beyond reputestevesainty has a reputation beyond reputestevesainty has a reputation beyond reputestevesainty has a reputation beyond reputestevesainty has a reputation beyond reputestevesainty has a reputation beyond repute
Default Re: Tax question

You will also get a general tax allowance of 2,000€ and 3,700€ earnings related allowance (this reduces, on a sliding scale, the more you earn and disappears at earnings over 14,450).

A simple view is reduce your total income by 2,000€, multiply the balance by 19% to get the tax due, then reduce this amount by 19% of 5,550 (1,054.50) and 19% of 3,700 (703).

This is, of course assuming that your income comes within the bands allowed for this level of taxation.
stevesainty is offline  
Old Mar 20th 2018, 10:11 am
  #3  
Forum Regular
Thread Starter
 
Joined: Oct 2017
Posts: 34
Kevo11 is an unknown quantity at this point
Default Re: Tax question

Originally Posted by stevesainty View Post
You will also get a general tax allowance of 2,000€ and 3,700€ earnings related allowance (this reduces, on a sliding scale, the more you earn and disappears at earnings over 14,450).

A simple view is reduce your total income by 2,000€, multiply the balance by 19% to get the tax due, then reduce this amount by 19% of 5,550 (1,054.50) and 19% of 3,700 (703).

This is, of course assuming that your income comes within the bands allowed for this level of taxation.
Thanks Steve. Complicated stuff!!
Kevo11 is offline  
Old Mar 20th 2018, 10:55 am
  #4  
BE Forum Addict
 
Joined: Aug 2009
Location: Costa Blanca
Posts: 2,605
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: Tax question

The other issue is timing of arrival and entry into Spanish tax system - you need 183 days in Spain to be liable for tax so if you arrive (intending to live as a resident) after tax cut off point (Spains Tax year is Jan-Dec) you would not be liable to make a declaracion until 2020 on your 2019 income.
spainrico is offline  
Old Mar 20th 2018, 11:29 am
  #5  
Forum Regular
Thread Starter
 
Joined: Oct 2017
Posts: 34
Kevo11 is an unknown quantity at this point
Default Re: Tax question

Originally Posted by spainrico View Post
The other issue is timing of arrival and entry into Spanish tax system - you need 183 days in Spain to be liable for tax so if you arrive (intending to live as a resident) after tax cut off point (Spains Tax year is Jan-Dec) you would not be liable to make a declaracion until 2020 on your 2019 income.
Gracias.
Kevo11 is offline  
Old May 2nd 2018, 12:42 pm
  #6  
Forum Regular
Thread Starter
 
Joined: Oct 2017
Posts: 34
Kevo11 is an unknown quantity at this point
Default Re: Tax question

Can someone please help with this scenario?

Move to Spain end of July ie less than 183 days remaining in tax year.

Rent a flat and advise private pension provider of my new address.

Say in August or September I drawdown some pension income eg 20k.

Will I escape UK tax as I'm living in Spain? Will I escape Spanish tax as less than 183 days?

Or is this a wishful thinking tax avoidance idea?

Thanks.
Kevo11 is offline  
Old May 2nd 2018, 7:37 pm
  #7  
BE Forum Addict
 
Joined: Aug 2009
Location: Costa Blanca
Posts: 2,605
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: Tax question

Very wishful. You have to be tax resident somewhere at any point in time. In your example, you will be UK tax resident.

Sometimes there are benefits in being in one system as against the other (this is only an option when you are relocating) so take professional advice.
spainrico is offline  
Old May 2nd 2018, 7:49 pm
  #8  
Forum Regular
Thread Starter
 
Joined: Oct 2017
Posts: 34
Kevo11 is an unknown quantity at this point
Default Re: Tax question

Originally Posted by spainrico View Post
Very wishful. You have to be tax resident somewhere at any point in time. In your example, you will be UK tax resident.

Sometimes there are benefits in being in one system as against the other (this is only an option when you are relocating) so take professional advice.
Thanks. Thought it might be!!
Kevo11 is offline  
Old May 2nd 2018, 10:18 pm
  #9  
MODERATOR
 
Fred James's Avatar
 
Joined: Jun 2006
Location: Granada Costa
Posts: 10,668
Fred James has a reputation beyond reputeFred James has a reputation beyond reputeFred James has a reputation beyond reputeFred James has a reputation beyond reputeFred James has a reputation beyond reputeFred James has a reputation beyond reputeFred James has a reputation beyond reputeFred James has a reputation beyond reputeFred James has a reputation beyond reputeFred James has a reputation beyond reputeFred James has a reputation beyond repute
Default Re: Tax question

Technically speaking, you cease to be tax resident in the UK when you leave permanently, but HMRC will continue to consider you tax resident until you can prove you are tax resident somewhere else. Once you can prove this, there is the possibility of a tax rebate.

Yes, if you take the lump sum while not tax resident in Spain, it will be free of Spanish tax.
Fred James is offline  

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Contact Us - Archive - Advertising - Cookie Policy - Privacy Statement - Terms of Service - Do Not Sell My Personal Information -

Copyright © 2022 MH Sub I, LLC dba Internet Brands. All rights reserved. Use of this site indicates your consent to the Terms of Use.