Saltydog

Hi - my wife and I are looking to move to Spain next summer but having looked at the tax implications of receiving Uk state pensions in Spain remain confused as the different sites seem to give differing information. Some say that if in Spain for 183+ days p.a. we would be liable to Spanish tax even on UK state pensions - others state that UK state pensions remain taxed in the UK. Can anybody confirm exactly what the reality is - are we taxed on UK state pensions in Spain under Spanish tax regulations or do they remain under UK tax and exempt from Spanish taxes? Also we will have property in a 3rd wofld country - not income earning but for holidaying and long term investment - is there a Spanish tax implication in this?
Thanks

Lynn R

The only pensions which are not taxable in Spain are UK Crown Pensions (Civil Service, Armed Forces, Police, Teachers, etc). The UK state pension is taxable in Spain as are private pensions and all other worldwide income either earned or from investments.

Listen Very Carefully

And you should be paid your uk state pension free of uk tax

Joppa

I let someone else comment on overseas property.
As far as your UK state pension is concerned, it becomes taxable in the country you are deemed to be tax-resident. So once you move to Spain and spend longer than 183 days in a calendar year, or otherwise it's the centre of economic or vital interests, you are liable to pay Spanish tax on it. The only income that is always taxable in UK is UK government pension such as civil service. If you are tax-resident in Spain, you don't get taxed in Spain but you still have to declare the details on Spanish tax return, as it may affect your tax-free allowances.

tebo53

From what I understand, expats who still own property in the UK are paying tax on "assumed" income from letting the property even though its not being let. Is this correct?

Steve

Fred James

That is correct. A UK home is classed as a second home and is taxed just as a second Spanish home would be taxed.

wellinever

So on what income would a non Spanish property be taxed? Or do you mean capital gain tax when and if sold?

tebo53

The Spanish tax man will automatically assume that you will be renting out the property and apply taxes to the (assumed) rent.

Steve

spainrico

Good tax guide here

https://www.pellicerheredia.com/en/open-library/

wellinever

That cannot be right .
If a property was rented out in the UK legally (with contract) then first dibs at Tax would be HMRC, not Spain.
But to claim that a property is being rented out in another country without proof of income or anything else and charging a Tax on it would surely be illegal.

tebo53

if you have a look at reply #6 from Fred James he has agreed. Fred is somewhat an expert in tax matters. Perhaps Fred could give an explanation about 2nd home taxes.
Steve

Lynn R

Exactly the same applies to any additional properties a taxpayer may own in Spain, they have to pay this imputed income tax, so I very much doubt it is illegal.

bobd22

That is correct if the UK property is not rented out. If the the property is rented out then tax is paid on that income rather than it being imputed. That tax is usually paid to HMRC as the property is situated in the UK. If Spain wants tax on the rented property then the double tax agreement comes into play. I have rented a UK property for nearly 4 years now, I pay tax on it to HMRC but declare that income as UK tax paid on spanish declaration to date I have had no issues. Imputed infers that tax hasn't actually been paid which if rented tax has been paid. Plus if rented the property is no longer available for one to use.

Library Ticket

I am a permanent resident in Spain and own a garage in a different building. I have to pay imputed tax on the garage !!!

Fred James

Tax law in most countries states that income earned in that country is taxed in that country EVEN IF YOU ARE NOT TAX RESIDENT. Most people don’t realise that. Additionally most countries tax their tax residents on all of their world wide income. This is not normally a problem as inter-country tax treaties take care of that. The basic rule is that you won’t pay two lots of tax on the same income. The only question is who gets first “dibs” on it and the depends on the individual tax treaties.