helenp

Excuse me if this is an idiot question but I have read that in Spain you are taxed on Savings as if it is an income. Is this so? and if it is what rate of tax is it, is it taken automatically or do you have to do it as self assessment in tax return?

Helen

Fred James

Tax is deducted at source by the bank at 18%.

You declare it on your tax return as income and also declare the tax deducted. It then gets rolled up into the whole calculation and you pay the appropriate rate of tax on it.

If you pay no tax you can claim it back.

helenp

OK thanks, I just wondered what people did to avoid a heavy tax on a lump sum they are to live off for a couple of years, would you keep the majority in UK account (but then you have the transfer fees)then transfer every couple of months when you needed it to avoid heavy tax?

jonsol

But money held in the U.K. has to be declared ( and taxed ),to the Spanish Tax man if you live in Spain

helenp

OK so there is no way around it. I will leave it up to the tax man to do with it what he wishes.

patsywhitehair

leave your lump sum in a good account back in UK and the interest on that lop over every month to nationwide b/s then take out what you need with your card every week with no charge,pat

helenp

OK thanks that sounds like a good idea that is what I thought of doing, just all this tax stuff is confusing.

Helen

Mitzyboy

Helen, whichever way you draw it, it will always be subject to wealth and income tax in Spain. The good news is that on another thread I did a calculation that showed that if your income was around 13000 euros you would not pay any tax in Spain or England, depending of course on circumstances.
So don't just assume you are going to be heavily taxed ... thats not automatically the case