UK Pensions Taxable in UK or Spain?
Jan 28th 2011, 2:44 pm
#76
Joined: Jun 2006
Location: Granada Costa
Posts: 10,908
Re: UK Pensions Taxable in UK or Spain?
Not really!
We have yet to establish what type of pensions they are.
If they are not government pensions but state retirement pensions they will be taxed in Spain anyway - irrespective of whether you have agreed with HMRC to "export" them free of UK tax.
We have yet to establish what type of pensions they are.
If they are not government pensions but state retirement pensions they will be taxed in Spain anyway - irrespective of whether you have agreed with HMRC to "export" them free of UK tax.
Last edited by Fred James; Jan 28th 2011 at 2:51 pm.
Jan 28th 2011, 2:55 pm
#77
BE Enthusiast
Joined: Aug 2007
Location: Los Martinez
Posts: 858
Re: UK Pensions Taxable in UK or Spain?
I'm hoping Fred can answer this one for me. Both my wife and myself will be taking early retirement from the NHS on a superranuated pension each. Is it going to be worth us declaring this in Spain or keeping it in the UK and paying UK income tax on it?
If as mentioned above, if we declare it in Spain should we be making seperate declarations? Jointly our pensions are going to be worth around £23000pa. We both have additional voluntary pensions that stand seperate to the statutory one, and of course the state pension, but this won't be available for another 6 years.
If as mentioned above, if we declare it in Spain should we be making seperate declarations? Jointly our pensions are going to be worth around £23000pa. We both have additional voluntary pensions that stand seperate to the statutory one, and of course the state pension, but this won't be available for another 6 years.
Jan 28th 2011, 2:56 pm
#78
Just Joined
Joined: Apr 2004
Location: Spain/UK
Posts: 25
Re: UK Pensions Taxable in UK or Spain?
thanks for all replies so far
The government pensions I mentioned are actually UK basic retirement pensions with a small topup on mine (£1000).
regards merlino
The government pensions I mentioned are actually UK basic retirement pensions with a small topup on mine (£1000).
regards merlino
Jan 28th 2011, 2:56 pm
#79
Lost in BE Cyberspace
Joined: Jun 2005
Location: Puente Esuri
Posts: 6,904
Re: UK Pensions Taxable in UK or Spain?
Not really!
If he lives in Spain he will be taxed in Spain (unless they are government pensions) so the UK tax structure and allowances are irrelevant.
It's not a question of "exporting" one of the pensions - they are taxed in Spain irrespective of any UK allowances.
What has to be done is to get HMRC to allow the pensions to be paid tax free in the UK otherwise you get taxed twice and then have to go through the process of getting the tax back from HMRC.
If he lives in Spain he will be taxed in Spain (unless they are government pensions) so the UK tax structure and allowances are irrelevant.
It's not a question of "exporting" one of the pensions - they are taxed in Spain irrespective of any UK allowances.
What has to be done is to get HMRC to allow the pensions to be paid tax free in the UK otherwise you get taxed twice and then have to go through the process of getting the tax back from HMRC.
Do you know if the Hacienda have anything similar to the 1 for 2 reduction if all the pensions come to Spain? That would be awful. Can all PP be exported before tax? if not then you are stuffed and would have to pay and offset at the Spanish end
Jan 28th 2011, 3:30 pm
#80
Senior Moment
Joined: Jan 2006
Location: On the edge
Posts: 20,460
Re: UK Pensions Taxable in UK or Spain?
We were told specifically HMRC in Nottingham deal with it
Jan 28th 2011, 3:40 pm
#81
Joined: Jun 2006
Location: Granada Costa
Posts: 10,908
Re: UK Pensions Taxable in UK or Spain?
It will probably be better to be taxed separately as your wife's pension will be less than the allowances so she will pay no tax.
Jan 28th 2011, 3:51 pm
#82
Joined: Jun 2006
Location: Granada Costa
Posts: 10,908
Re: UK Pensions Taxable in UK or Spain?
I'm hoping Fred can answer this one for me. Both my wife and myself will be taking early retirement from the NHS on a superranuated pension each. Is it going to be worth us declaring this in Spain or keeping it in the UK and paying UK income tax on it?
If as mentioned above, if we declare it in Spain should we be making seperate declarations? Jointly our pensions are going to be worth around £23000pa. We both have additional voluntary pensions that stand seperate to the statutory one, and of course the state pension, but this won't be available for another 6 years.
If as mentioned above, if we declare it in Spain should we be making seperate declarations? Jointly our pensions are going to be worth around £23000pa. We both have additional voluntary pensions that stand seperate to the statutory one, and of course the state pension, but this won't be available for another 6 years.
NHS pensions are not considered to be Government pensions within the terms of the Double Taxation Treaty.
You will probably be better off declaring jointly but it is not a decision you have to make. The tax program works out both options and you declare accordingly.
Jan 28th 2011, 5:18 pm
#83
Lost in BE Cyberspace
Joined: Jun 2005
Location: Puente Esuri
Posts: 6,904
Re: UK Pensions Taxable in UK or Spain?
Makes sense for us since all our tax is dealt with at Ty Glas but this would not be known to thewebsite I just logged on unannounced so my guess is the change has been made generally. Check it out at HMRC.
Jan 29th 2011, 10:52 pm
#84
Just Joined
Joined: Sep 2006
Posts: 2
Re: UK Pensions Taxable in UK or Spain?
Well I wrote to Ty Glas just before Christmas, because they normally deal with my affairs, (although when I rang up a few months I spoke to Nottingham), but I've just had a letter and form back from Glasgow !!. I just filled it in and sent it back.
What I would say is that when I spoke to Ty Glas just before Christmas they told me that the delay in opening post (opening, not responding) was about 8 weeks, so they may just be farming post round the country, as I got a reply in 5 weeks, and my wife in 4.
What I would say is that when I spoke to Ty Glas just before Christmas they told me that the delay in opening post (opening, not responding) was about 8 weeks, so they may just be farming post round the country, as I got a reply in 5 weeks, and my wife in 4.
Jan 30th 2011, 12:05 am
#85
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Joined: Sep 2010
Location: Near Alora....but not too near. :)
Posts: 1,646
Re: UK Pensions Taxable in UK or Spain?
Jan 30th 2011, 5:34 am
#86
Ex Expat
Joined: Oct 2006
Location: West Midlands, ex Granada province
Posts: 2,140
Re: UK Pensions Taxable in UK or Spain?
Lets define pensions : -
State Retirement Pension. Paid to anyone who has paid ss for the correct No of years.
Government Pension. Paid to those who have worked for the government or local authority ie civil servants, teachers, local government officials, police fire and others but not all NHS.
Your State pension is taxed in the sense that in your case it eats up most of your Personal Allowance and then more of your Private (company) pension is subject to tax at 20%.
There is a more pernicious and subtle effect in your case your age allowance of £9940 is reduced by £1 for each two pounds that your pensions total exceed £23,000 until back to the personal allowance level of £6475 is reached.
So lets say your State Pension is £7000 plus company pension of £19000 making £26000 so you age allowance is reduced by £3000/2 = £1500 to £8540 so that more of your pension is taxed at 20% or to put it another way you will pay £1500 x 20% = £300 extra tax.
What you have to try to achieve is to export one of your Pensions tax free from UK then you get two personal allowances. With the ups and downs of the euro both personal allowance are about the same and the first tranche of tax is at about the same level so whichever one you might be able to move it is to your advantage. In my personal case with a GP and a SP it is not only possible but forced by the double taxation agreement where the GP has to stay at home in UK and be taxed there but allows the SP to be exported tax free and taxed in Spain
It is futher enhanced by the reduction in the grand total reducing the £1 for £2 penalty.
Does all this make sense?
State Retirement Pension. Paid to anyone who has paid ss for the correct No of years.
Government Pension. Paid to those who have worked for the government or local authority ie civil servants, teachers, local government officials, police fire and others but not all NHS.
Your State pension is taxed in the sense that in your case it eats up most of your Personal Allowance and then more of your Private (company) pension is subject to tax at 20%.
There is a more pernicious and subtle effect in your case your age allowance of £9940 is reduced by £1 for each two pounds that your pensions total exceed £23,000 until back to the personal allowance level of £6475 is reached.
So lets say your State Pension is £7000 plus company pension of £19000 making £26000 so you age allowance is reduced by £3000/2 = £1500 to £8540 so that more of your pension is taxed at 20% or to put it another way you will pay £1500 x 20% = £300 extra tax.
What you have to try to achieve is to export one of your Pensions tax free from UK then you get two personal allowances. With the ups and downs of the euro both personal allowance are about the same and the first tranche of tax is at about the same level so whichever one you might be able to move it is to your advantage. In my personal case with a GP and a SP it is not only possible but forced by the double taxation agreement where the GP has to stay at home in UK and be taxed there but allows the SP to be exported tax free and taxed in Spain
It is futher enhanced by the reduction in the grand total reducing the £1 for £2 penalty.
Does all this make sense?
Jan 30th 2011, 6:52 am
#87
Forum Regular
Joined: Aug 2008
Location: Orihuela Costa
Posts: 107
Re: UK Pensions Taxable in UK or Spain?
John/Kath, just for information: I received this week a letter from HMR&C dated 12/01/11 notifying receipt of my double taxation form dated 02/02/2010. I sent this form to Nottingham but the letter came from Cardiff.
I wouldn't wait in for the postman.
I wouldn't wait in for the postman.
Last edited by gardner8; Jan 30th 2011 at 6:53 am. Reason: error
