Notdunroamin

I think you're confusing yourself by thinking about income from a UK pension as somehow distinct from other pensions because it isn't.

Last years 'renta web' simulator is still available here.

https://www2.agenciatributaria.gob.e...OLAB&EJER=2022

Andalus

I think you're absolutely right about the confusion!
The only point I'd query is that the UK state pension is distinct from a UK government works pension because the latter is exempt from Spanish taxation. But whilst it might not actually be taxable in Spain, my concern is the extent to which it impacts on the taxation of the UK state pension i.e.whether the exempt UK government works pension could swallow up any allowances and, at the same time, cause the UK state pension to be taxed at a higher rate?

Fred James

I suggest you just stop worrying about it. The tax treaty will almost certainly affect the tax you pay on your state pension. Compared to those of us who are not lucky enough to get a gold plated, indexed linked government pension, you will end up paying less than we do. Personally, I can see no justification at all for government pensioners to get this valuable concession.

spainrico

Totally agree Fred!

Andalus

Thank you gentlemen, always interesting to get the opinions of Daily Mail readers.

Particularly those who are also knowledgeable on broader subjects.

Notdunroamin

You're still not getting it.

It's not correct to say that UK government pensions are exempt from taxation in Spain however in this circumstance you are entitled to credit for tax paid in UK which can be offset against your overall liability which itself is arrived at by gross aggregation of all pension incomes, be they state, private or government.

For some that aggregation can mean that they are pushed into a higher tax bracket with the unfortunate result that they pay more tax.

This is not a breach of the Dual Tax Agreement just the way the system works.

Notdunroamin

How so Fred, higher income = higher tax, a portion of that being stopped at source in the UK doesn't negate that?

spainrico

As I understand it the point is this - for those who earn a civil service type pension on which tax must be paid in the UK this is offset by the UK tax allowances (high in comparison to the Spanish).

In contrast, someone like me has to declare all their pension income (UK gov state pension and private pension NON-civil service in my case) in Spain I only get the Spanish tax allowances. (And neither is my private index linked)

So surely having the civil service pension/UK tax allowances is beneficial compared to people like me.

Fred James

Double tax allowances and two low tax bands.

Fred James

What has the Daily Mail got to do with this discussion?

paulhe

Can one choose to have one’s pension taxed in UK? I ask because then , presumably, one can apply the tax allowance otherwise not available? I currently live in Australia and receive a small final salary pension paid from aged sixty. I have to declare here in Aus (as I would have to in Spain when I finally get to retire there) but I cannot utilise the UK allowance so pay tax on the gross amount. If taxed in UK (if I could choose to do so) presumably I would be entitled to claim the allowance which is higher than the amount I receive and under double taxation laws/Regs I would pay no tax on the amount ?
paul

Fred James

Short answer - no. You get no choice in the matter. It’s down to the tax law in your country of tax residence and any tax treaties that exist between the pension providing country and your country of residence.

canadianexpat2024

This is slightly complicated and will probably become more so as we are eligible for UK and Canadian State Pensions when the time comes. <headache>

Algorfa1950

We are just about to move to Spain permanently and wondered what the Personal Allowances are in Spain for pensioner couples? Also can we choose to be taxed in the UK on our state pensions as they only fall jointly just over the Personal Allowances threshold but I get the impression that Spanish thresholds are much lower for pensioners and therefore we would pay more tax. We have our two Basic State Pensions (mine is negligible and in fact I transfer £1200 of my allowances to my husband every year to lower his tax threshold) and my husband has two tiny private pensions (these are the ones he currently pays about £25 per month in tax on ).

We also have a bungalow to sell and are hoping to get it sold before the 183 days is up. If we don't what is the tax implications in Spain as this at the moment is our Primary Residence until we find something in Spain to buy.

Lynn R

Firstly, no you cannot choose to be taxed in the UK on your state pensions. The only pension income which can be taxed in the UK, if you are tax resident in Spain, is that from Crown pensions (eg Civil Service, Armed Forces, Police, Local Government etc).

The basic Spanish personal tax allowance for anyone aged 65-74 is €6,700 (which rises to €8,100 for those aged 75 and over) plus a further €2,000 allowance for general expenses. If the spouse of a taxpayer has no income of their own, or very little, they can opt to make a joint return which gives the spouse with an income €3,400 of their allowance to set against that. However, there is also a low income allowance, which means that anyone with an income of €15,000 a year from either work or pensions pays no income tax at all so if both spouses have an income below that they would be better off making individual returns and both benefiting from the low income allowance. For income over €15,000 the low income allowance tapers away gradually until someone with an income of €21k does not get any of it, only the basic €6,700 plus €2,000 allowances. To benefit from the low income allowance, the individual must not have income from sources other than work (eg rental or investment income) of more than €6,500.

This example is based on last year's figures, there has been a further increase this year in the allowance. The changes are explained in the second article in English.

Reducción por obtención de rendimientos del trabajo 2023 | Club MAPFRE (mapfretecuidamos.com)

Spain tax changes 2022-2023: less income tax for low earner and new taxes for the rich — idealista/news