# Financial help with Spanish Tax (Pensions and Income Investments)



## RuthH (Jul 8, 2015)

We are in the process of looking to move to Spain on a permanent basis. I have just been talking to somebody and they have advised me I could be liable to all sorts of tax in Spain in relation to pensions and investments. This is not my strongest point so I was hoping somebody in Spain could explain in such a way I could understand. I have looked at a couple of the web site on the subject and I just got lost.

I need to understand the follow:- 

When does the Spanish tax year start and end?
If I live in Spain full time does my husband have to pay tax on his English state pension and if so do you know how much?
Does anybody know what the tax is on investment income?
Does anybody know what the tax is on private pension income?
Do you have to pay tax a pension lump sum and do you know what the percentage is?

I understand this is an in depth subject but I am trying to understand if I can survive in Spain on my husbands pension and then it is a case of trying to work out if we made some investments (either pension or income investment) what we would be taxed on and how much.

All of these private pensions income and possible investment income would be based in the UK.

Any help or direction to a web site that explains this all in simple English would be truly appreciated.

Thank you


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## 90199 (Mar 21, 2010)

I have a Govt pension, which is taxed in the U.K. and not in Spain, my O.A.P. I declare in Spain along with my investments and any other income, and if I have profited immensely then I pay tax here.

However, I now use a Blevins Franks, financial adviser, for my investments, this costs but I have reduced legally my liabilities for Spanish taxation, and inheritance tax, plus I am in profit!

The financial year is from 1st of January to the 31st of December, if you reside more than 6 months, 183 days, you have to make a tax declaration, and your lump sum if received within this period will be taxable, however I made sure that my lump sum was received, long before I moved to Spain, hence no tax.

Taxation here is no big deal, not at all worrying, I employ an accountant for my tax returns, he sorts all the paperwork, and I sit back and cultivate fruit and flowers


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## Lynn R (Feb 21, 2014)

RuthH said:


> We are in the process of looking to move to Spain on a permanent basis. I have just been talking to somebody and they have advised me I could be liable to all sorts of tax in Spain in relation to pensions and investments. This is not my strongest point so I was hoping somebody in Spain could explain in such a way I could understand. I have looked at a couple of the web site on the subject and I just got lost.
> 
> I need to understand the follow:-
> 
> ...


The Spanish tax year runs from 1 January - 31 December, and tax returns must then be submitted by 30 June of the following year.

You can see details of the tax rates (for both earned income and investment income) and personal allowances here:-

http://www.advoco.es/hot-topics/107-spanish-income-tax-rates-2015.html

If you received a pension lump sum once you had become tax resident in Spain (ie after you had been in Spain for 183 days or more) then that lump sum would be treated the same as earned income and taxed according to what income band that plus any other income would place you in. Private pension income (and indeed a State pension) is treated the same as earned income - the only exception is for Crown pensions (civil service and certain other public services) which can only be taxed in the UK, although they must now also be declared on your Spanish tax return as exempt income, and may result in someone having to pay a higher tax rate on their other income.

Residents of Spain (and indeed many other countries) are taxed on all their worldwide income, so that the fact that your pension or other investments would be in the UK isn't relevant - except for the fact that if they amount to more than €50,000 in any single asset class (cash, shares, pension funds, property, etc) then you would also need to submit a separate declaration of overseas assets (called Modelo 720) giving details of all of them. There are heavy fines for failing to declare such assets if the Spanish Tax Office discovers at a later date that someone has failed to comply.


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## The Skipper (Nov 26, 2014)

RuthH said:


> We are in the process of looking to move to Spain on a permanent basis. I have just been talking to somebody and they have advised me I could be liable to all sorts of tax in Spain in relation to pensions and investments. This is not my strongest point so I was hoping somebody in Spain could explain in such a way I could understand. I have looked at a couple of the web site on the subject and I just got lost.
> 
> I need to understand the follow:-
> 
> ...



If you take professional advice you have nothing to fear. We are paying less tax in Spain than we would in the UK because there are legal ways of investing and mitigating tax here. Like Hepa, we use Blevins Franks for investment advice and we have no complaints!


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## RuthH (Jul 8, 2015)

Thank you for the link. That information is just what I needed, it also tells me what our personal allowances are.


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