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Pension advice

Posted: Sun Jul 24, 2022 11:55am
7 replies258 views8 members subscribed
Martin 53

Posts: 8

2 helpful points

Location: Estepona

Joined: 9 Sep 2021

If we were to move to Spain for 180 days would my pension be taxed by Spain or uk, and which would be the best 

Regard Martin 

Holaitsdavid

Posted: Mon Jul 25, 2022 12:56am

Holaitsdavid

Helpful member

Posts: 925

327 helpful points

Location: Mijas Costa

Joined: 30 Mar 2021

Posted: Mon Jul 25, 2022 12:56am

If a government pension and a civil servant no, if a private pension 'yes'. Don't make any move without expert advice, tax can be a problem in Spain tax free allowances are low and unlike UK people over 65 still have to pay 'social security'. You become a Tax resident after 180 days and the tax year starts 1st January. but it will be back dated in the year you get residence.

Many accountants here, this is one. https://www.lemon.consulting/spanish-services

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Jeffers

Posted: Mon Jul 25, 2022 7:47am

Posts: 65

9 helpful points

Location: La Cala De Mijas

Joined: 14 Mar 2021

Posted: Mon Jul 25, 2022 7:47am

Holaitsdavid wrote on Mon Jul 25, 2022 12:56am:

If a government pension and a civil servant no, if a private pension 'yes'. Don't make any move without expert advice, tax can be a problem in Spain tax free allowances are low and unlike UK people over 65 still have to pay 'social security'. You become a Tax resident after 180 days and the tax y...

...ear starts 1st January. but it will be back dated in the year you get residence.

Many accountants here, this is one. https://www.lemon.consulting/spanish-services

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I believe you become a Spanish tax resident after 183 days?

https://taxsummaries.pwc.com/spain/individual/residence#:~:text=Individuals%20are%20resident%20in%20Spain,another%20country%20can%20be%20proven.

Unless as you state your pension is a UK government pension.

Which makes me wonder if a UK OAP pension counts as taxable income in Spain??

Holaitsdavid

Posted: Mon Jul 25, 2022 6:40pm

Holaitsdavid

Helpful member

Posts: 925

327 helpful points

Location: Mijas Costa

Joined: 30 Mar 2021

Posted: Mon Jul 25, 2022 6:40pm

Jeffers wrote on Mon Jul 25, 2022 7:47am:

I believe you become a Spanish tax resident after 183 days?

https://taxsummaries.pwc.com/spain/individual/residence#:~:text=Individuals%20are%20resident%20in%20Spain,another%20country%20can%20be%20proven.

Unless as you state your pension is a UK government pension.

Which makes me wonder if a UK OAP pension counts as taxable income in Spain??

Your UK state pension will be taxed a regular income in Spain according to Spanish rates. Spanish income tax rates 

https://expatra.com/guides/spain/uk-pensions-and-tax-when-living-in-spain/

There is an agreement for ex civil servants to be taxed in the UK  

Trevor47

Posted: Tue Jul 26, 2022 11:27am

Posts: 65

28 helpful points

Location: Manilva

Joined: 19 Nov 2021

Posted: Tue Jul 26, 2022 11:27am

Hi Martin,

I am not sure you can just become a Resident after 180 days. You have to apply to become a Resident and prove you have the means to cover your medical health or have UK S1 documentation.

As indicated by David there is an agreement that State Pensions are taxed in UK, as they send Spain a set amount each year to cover the S1 commitments.  Other pensions may be taxed.

Whatever you do, get an accountant to help. We use Rios Espinosa in San Luis De Sabinillas as they are local and speak English and so our business and personal accounts.

Martin 53

Posted: Tue Jul 26, 2022 2:07pm

Martin 53

Original Poster

Posts: 8

2 helpful points

Location: Estepona

Joined: 9 Sep 2021

Posted: Tue Jul 26, 2022 2:07pm

Trevor47 wrote on Tue Jul 26, 2022 11:27am:

Hi Martin,

I am not sure you can just become a Resident after 180 days. You have to apply to become a Resident and prove you have the means to cover your medical health or have UK S1 documentation.

As indicated by David there is an agreement that State Pensions are taxed in UK, as they send Spain a set amount each year to cover the S1 commitments.  Other pensions may be taxed.

Whatever you do, get an accountant to help. We use Rios Espinosa in San Luis De Sabinillas as they are local and speak English and so our business and personal accounts.

Thank you this was very useful šŸ‘ 

Jeffers

Posted: Wed Jul 27, 2022 10:48am

Posts: 65

9 helpful points

Location: La Cala De Mijas

Joined: 14 Mar 2021

Posted: Wed Jul 27, 2022 10:48am

Martin 53 wrote on Sun Jul 24, 2022 11:55am:

If we were to move to Spain for 180 days would my pension be taxed by Spain or uk, and which would be the best 

Regard Martin 

I assume you are aware that you can't do one visit of 180 days?

You can only do 90 days in a floating 180 days.

MartinK

Posted: Wed Jul 27, 2022 11:55am

Posts: 11

4 helpful points

Joined: 10 Aug 2021

Posted: Wed Jul 27, 2022 11:55am

This boils down to whether you become resident in Spain, which post Brexit requires certain conditions to be satisfied. If you become resident, the Spanish tax authorities expect you yo declare and pay tax on your worldwide income. There will be a period of time when you will pay tax to both UK and Spain but you can claim back the double taxation from UK once you have started paying tax in Spain. We used a local accountant the first year we had to declare our income in Spain but once you have a digital certificate you can do it all online. You also need to declare your worldwide assets, including and drawdown pension funds which will be taxed above a (generous) allowance. Again, we used a local form to do this the first year but now do it ourselves on line. Our tax affairs are simple so I don't see the need to pay someone to fill in a form for me.

If you intend remaining as UK resident then your stays in Spain are governed by rules about 90days per visit and 180 in total per year. I dont know any details about that.

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