# Declaration of UK govt / civil service pensions



## larryzx (Jul 2, 2014)

Those who have a Governement employee pension (police, military etc) of course benefit, in that it is not only ignored for income tax in Spain but also for one's annual income. Thus those who only have an OAP and little other income in addition to their government pension are in the under 18,000€ p.a. so pay not more than 8€ p.m. for prescriptions.


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## extranjero (Nov 16, 2012)

larryzx said:


> Those who have a Governement employee pension (police, military etc) of course benefit, in that it is not only ignored for income tax in Spain but also for one's annual income. Thus those who only have an OAP and little other income in addition to their government pension are in the under 18,000€ p.a. so pay not more than 8€ p.m. for prescriptions.


Not for much longer! Those with government pensions WILL have to declare it next year, even though it will be still taxed in the UK .
It will be declared in the exempt from income tax box.
However I have heard it will be used to work out the income tax base, so will probably result in more income tax to be paid in Spain.
I think there is a thread about it somewhere.those with Govnt pensions have had it good for years, especially if their pensions in each country were under the tax threshold resulting in no tax.
Regarding prescriptions, I always thought it was wrong when those with govt pensions claimed to have an annual income of less than18k in order to pay less prescription charges, when in fact they received very much more. Legal it may be, but morally wrong.


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## 90199 (Mar 21, 2010)

I have a government pension, for years I have declared the same on my Spanish and English tax returns, fortunately I no longer have to submit English tax returns.

My O.A.P. is declared on my Spanish tax returns, normally I do not pay tax on this because I am usually under the Spanish threshold, however last return I had to pay Spanish tax because some of my investments in Spain did rather well so I gained, the Spanish treasury gained, and every body was very happy


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## larryzx (Jul 2, 2014)

extranjero said:


> Regarding prescriptions, I always thought it was wrong when those with govt pensions claimed to have an annual income of less than18k in order to pay less prescription charges, when in fact they received very much more. Legal it may be, but morally wrong.


We did not make any claim. In Andalucia it was automatic. I assume the Hacienda and Health computers are linked in some way. Like probably all others in the same situation as me, had I been asked to declare I would have declared my full income.


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## xabiaxica (Jun 23, 2009)

larryzx said:


> We did not make any claim. In Andalucia it was automatic. I assume the Hacienda and Health computers are linked in some way. Like probably all others in the same situation as me, had I been asked to declare I would have declared my full income.


it's based upon your declared income on your tax return - that's how they know what the 'cap' should be for you


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## extranjero (Nov 16, 2012)

They don't ask you what your full income is though, they go by your income tax return.hopefully next year when ALL income is declared, the prescription. charges scale will be fairer. 
That is, Of course, if people with Govnt pensions actually declare them.


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## 90199 (Mar 21, 2010)

larryzx said:


> We did not make any claim. In Andalucia it was automatic. I assume the Hacienda and Health computers are linked in some way. Like probably all others in the same situation as me, had I been asked to declare I would have declared my full income.


Same here.


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## larryzx (Jul 2, 2014)

xabiachica said:


> it's based upon your declared income on your tax return - that's how they know what the 'cap' should be for you


And that, just like Hepa, is as I declared, i.e. my OAP and all other income declarable in Spain. The UK Gov pension is not declared here (exactly as a Spanish Gov pension would not be declared in UK). 

When I was at Hacienda, just after I came here 25 years ago, and I showed them my Gov pension income, they pushed the paperwork back across the desk saying they did not require it.

And Extranjero, (_That is, Of course, if people with Govnt pensions actually declare them.)_ even if Gov Pensioners did not declare then HMRC would perfectly correctly, inform them.


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## extranjero (Nov 16, 2012)

I was not referring to people in the UK not paying tax, but the fact that the cap for the amount paid for prescriptions doesn't take into account that the person 's income is often far greater than the amount declared in Spain, so a true figure on which to work out the cap has not been obtained.
As I said, though, it's all set to change next year!


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## larryzx (Jul 2, 2014)

extranjero said:


> I was not referring to people in the UK not paying tax, but the fact that the cap for the amount paid for prescriptions doesn't take into account that the person 's income is often far greater than the amount declared in Spain, so a true figure on which to work out the cap has not been obtained.
> As I said, though, it's all set to change next year!


It does not take into account many things, e.g. that a person might have a great income but live in a hovel or a mansion, ride a bike or have a Rolls Royce etc. That some people have a lot of illness, invalidities etc and need lots of medication, whilst others enjoy extreme good health ad never need to buy even an aspirin. Nor that some people will automatically be jealous of others, instead of being happy for them. That's life.


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## xabiaxica (Jun 23, 2009)

larryzx said:


> It does not take into account many things, e.g. that a person might have a great income but live in a hovel or a mansion, ride a bike or have a Rolls Royce etc. That some people have a lot of illness, invalidities etc and need lots of medication, whilst others enjoy extreme good health ad never need to buy even an aspirin. Nor that some people will automatically be jealous of others, instead of being happy for them. That's life.


the 'cap' has to be based upon something - & that something is declared income

so it doesn't matter if they ride a bike or a drive Rolls Royce, nor live in a hovel or a mansion

all that matters is the declared income

the point extranjero was making is that when you don't declare all your income - even if it's totally legitimate that you don't - the figure that dictates how much you pay for your medicines is a false one

don't know where jealousy comes into it :confused2:


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## extranjero (Nov 16, 2012)

Exactly- couldn't put it better myself!


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## larryzx (Jul 2, 2014)

It is apparent that the amount one pays is not based on one's total income but on what one is required to declare. If it were on total income they would ask for that figure.


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## larryzx (Jul 2, 2014)

xabiachica said:


> the 'cap' has to be based upon something - & that something is declared income
> 
> :


Exactly, declared income, not total income as some seem to erroneously think.


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## xabiaxica (Jun 23, 2009)

larryzx said:


> It is apparent that the amount one pays is not based on one's total income but on what one is required to declare. If it were on total income they would ask for that figure.


since the rules in Spain are that one declares *all *income - hacienda would assume that you were doing so

the UK civil service pension is an odd exception

or was, since from next year you'll have to declare it, anyway


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## larryzx (Jul 2, 2014)

xabiachica said:


> since the rules in Spain are that one declares *all *income - hacienda would assume that you were doing so


No with respect the rules do not say that, as certain income derived outside Spain is not declarable in Spain,. The cap is base on the income which is declarable in Spain. 

Even from next year I may may not find that it is based on my whole income as I have an element which is non taxable, in UK at least, for work related injuries.

NB Like most, I do no like paying taxes but I always been 'happy' to do so.


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## xabiaxica (Jun 23, 2009)

larryzx said:


> No with respect the rules do not say that, as certain income derived outside Spain is not declarable in Spain,. The cap is base on the income which is declarable in Spain.
> 
> Even from next year I may may not find that it is based on my whole income as I have an *element which is non taxable, in UK at least, for work related injuries.*
> 
> NB Like most, I do no like paying taxes but I always been 'happy' to do so.



I'd check that out carefully - as I understand it, it doesn't matter if it isn't taxable in the UK - it's whether or not an equivalent income would be taxable in Spain that counts

this is why some 'offshore' UK workers get a shock when they move to Spain - suddenly they have to pay income tax, because that income isn't tax free here, as it would be if they were UK residents


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## extranjero (Nov 16, 2012)

larryzx said:


> It is apparent that the amount one pays is not based on one's total income but on what one is required to declare. If it were on total income they would ask for that figure.


It is based on one's total ncome, wherever it comes from, and surely someone who gets 18 k in the UK, Govnt pension, and 12 k declared in Spain, should not qualify for their prescription charges to be capped as if they only had 12 k income.
Isn't the whole point of the exercise, that those who get less, pay less.
How can this work, if someone who gets a high income gets a concession reserved for those on low incomes.
If people are only stating their income in Spain, knowing full well they are not entitled to the lower cap, it is morally wrong.
I think the state has not realised this loophole , and needs to ensure that it is clear that ALL income 
Must be taken into account when calculating the cap.


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## larryzx (Jul 2, 2014)

xabiachica said:


> I'd check that out carefully - as I understand it, it doesn't matter if it isn't taxable in the UK - it's whether or not an equivalent income would be taxable in Spain that counts


Well as at present my Government employee pension, and the injury award, are taxable ONLY in UK and not even declarable in Spain, that is irrelevant.

If or when the rules change, I will as previously, provide whatever information is required.


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## xabiaxica (Jun 23, 2009)

extranjero said:


> It is based on one's total ncome, wherever it comes from, and surely someone who gets 18 k in the UK, Govnt pension, and 12 k declared in Spain, should not qualify for their prescription charges to be capped as if they only had 12 k income.
> Isn't the whole point of the exercise, that those who get less, pay less.
> How can this work, if someone who gets a high income gets a concession reserved for those on low incomes.
> If people are only stating their income in Spain, knowing full well they are not entitled to the lower cap, it is morally wrong.
> ...


every source I've ever read states that worldwide income must be declared - though a UK govt income has always been paid in the UK & not declarable in Spain - but as we know - that's about to change - maybe that's the 'loophole' closing?


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## larryzx (Jul 2, 2014)

xabiachica said:


> every source I've ever read states that worldwide income must be declared - though a UK govt income has always been paid in the UK & not declarable in Spain - but as we know - that's about to change - maybe that's the 'loophole' closing?


As I am sure you know, the tax agreements between the various countries determine what is paid where. 

The one between Spain and UK is specific in that Government employee pensions in either country are only taxable at source. Anything else would amount to say the UK Gov paying tax to Spanish Gov. and vice versa, as it would have been paid to the employee by the foreign government.

As for the rules changing, re marginal rates, having been retired and living in Spain 26 years I am not that bothered, and my medication is less than 8 euros p.m..


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## xabiaxica (Jun 23, 2009)

larryzx said:


> As I am sure you know, the tax agreements between the various countries determine what is paid where.
> 
> The one between Spain and UK is specific in that Government employee pensions in either country are only taxable at source. Anything else would amount to say the UK Gov paying tax to Spanish Gov. and vice versa, as it would have been paid to the employee by the foreign government.
> 
> As for the rules changing, re marginal rates, having been retired and living in Spain 26 years I am not that bothered, and my medication is less than 8 euros p.m..


what is PAID yes - but not what is DECLARED - as said, with some exceptions

dual tax agreements mean that if you have already paid tax on a certain kind of income, then you don't pay the SAME tax again (although depending on local tax rates there might be _some _tax to pay - or even a rebate) 

however, if something is tax free in the UK for instance, it doesn't mean it will be tax free in Spain - & in that case you'd have to pay tax on it


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## larryzx (Jul 2, 2014)

xabiachica said:


> what is PAID yes - but not what is DECLARED - as said, with some exceptions
> 
> dual tax agreements mean that if you have already paid tax on a certain kind of income, then you don't pay the SAME tax again (although depending on local tax rates there might be _some _tax to pay - or even a rebate)
> 
> however, if something is tax free in the UK for instance, it doesn't mean it will be tax free in Spain - & in that case you'd have to pay tax on it


The agreement between Spain and UK says one does not declare gov employee pensions in the other country. That was why when I showed my pension payments record to Hacienda, 26 years ago when came to live here, they gave it back to me without looking at it.

I believe that Canada and Spain have a facility that if one pays 15% tax on all the income in Canada then there is no tax to pay in Spain. As I said, each country has a possibly different agreement.

I have always known that say tax free in UK does not automatically mean tax free in Spain. An example was the incapacity benefit, only tax free in Spain if it was over a certain percentage of invalidity. When I got it, mine was tax free in Spain.


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## xabiaxica (Jun 23, 2009)

larryzx said:


> The agreement between Spain and UK says one does not declare gov employee pensions in the other country. That was why when I showed my pension payments record to Hacienda, 26 years ago when came to live here, they gave it back to me without looking at it.
> 
> I believe that Canada and Spain have a facility that if one pays 15% tax on all the income in Canada then there is no tax to pay in Spain. As I said, each country has a possibly different agreement.
> 
> I have always known that say tax free in UK does not automatically mean tax free in Spain. An example was the incapacity benefit, only tax free in Spain if it was over a certain percentage of invalidity. When I got it, mine was tax free in Spain.


govt employee pensions are - soon to be were - the exception which I mentioned

*all *other income worldwide has to be declared in your country of fiscal residence & is subject to local tax rules & rates

Double tax treaty between Spain and the UK


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## mrypg9 (Apr 26, 2008)

xabiachica said:


> govt employee pensions are - soon to be were - the exception which I mentioned
> 
> *all *other income worldwide has to be declared in your country of fiscal residence & is subject to local tax rules & rates
> 
> Double tax treaty between Spain and the UK


Why is this being raised, in the first place, I wonder? Surely those who seek guidance on procedures regarding tax matters would approach their accountant, gestor, whatever. No need to create unnecessary confusion.

As you have pointed out, all one's income should be declared. That's what this 'one' does. Some amounts of my incomes are taxable in the UK, some in Spain. Tbh, I don't bother myself with the detail as the residual post -tax income is sufficient enough for my fairly modest lifestyle. 

One thing that bothers me is that as a retired person now of UK pensionable age I am required to pay a very small proportionate amount to the cost of the drugs I receive each month, five different lots. I can well afford to pay more but there seems no mechanism for so doing as I am already paying the maximum due.
I agree with extranjero that this is unfair. I would gladly pay more so those worse off can pay less or nothing at all. As it is, I leave a reasonable contribution in the CUDECA collecting box at the farmacia but it's ridiculous that retired immigrants with incomes well above the UK national average wage let alone the Spanish average should be heavily subsidised.
I find it embarrassing and I would be happy to pay more.


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## mrypg9 (Apr 26, 2008)

extranjero said:


> It is based on one's total ncome, wherever it comes from, and surely someone who gets 18 k in the UK, Govnt pension, and 12 k declared in Spain, should not qualify for their prescription charges to be capped as if they only had 12 k income.
> Isn't the whole point of the exercise, that those who get less, pay less.
> How can this work, if someone who gets a high income gets a concession reserved for those on low incomes.
> If people are only stating their income in Spain, knowing full well they are not entitled to the lower cap, it is morally wrong.
> ...


Quite right too!

It's ludicrous when someone who could be receiving a Teachers Pension of, say, £30k per annum or even more and who may have other income-producing assets can pay peanuts for expensive drugs.

The current rules for Teachers Pensions are that if you work straight from university until retirement you can qualify for a maximum 50% of final salary as pension. Many Head Teachers of large city comprehensives will be earning six figure salaries. 
Heads of Department could expect to retire on a substantial annual salary. Presumably other local government pensions have similar rules.
Teachers often being boring people, they tend to marry each other so a retired teacher couple can be quite comfortably off.
It's absurd when a couple with a joint pension income of over £50k or more per annum is required to contribute so little. Senior civil servants employed in Whitehall departments will be even better off on retirement.

I'm no red-hot socialist, in fact I'm not a socialist at all, but I do believe in 'from each according to his ability, to each according to his need'.
You will never find me complaining about fairly levied taxation. It's the price we pay for civilisation, as someone famous said.


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## larryzx (Jul 2, 2014)

_You will never find me complaining about fairly levied taxation_

However, the problem then arises, in that what one person believes is fair another does not. 

Should a person who is never ill subsidise those who require many expensive medications ? Maybe a monthly payment by the fit to the unfit ?


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## mrypg9 (Apr 26, 2008)

larryzx said:


> _You will never find me complaining about fairly levied taxation_
> 
> However, the problem then arises, in that what one person believes is fair another does not.
> 
> Should a person who is never ill subsidise those who require many expensive medications ? Maybe a monthly payment by the fit to the unfit ?


Surely you understand the principle of collective provision which underpins our tax and national insurance system and has done since 1908, when the State Retirement Pension was introduced?

I have never been ill in my life until very recently and therefore have not required any medication, expensive or not, in that time. I was therefore via my NI and progressive taxation contribution subsidising those who had the misfortune to be chronically sick - and very happy to be able to do so.

Your suggestion of a 'monthly payment by the fit to the unfit' is surely made tongue in cheek since no-one could take that seriously!!  Consider: at this moment I'm fit and have been for years but tomorrow I am hit on the head by a flying tree branch so am unfit but next week after a few day's rest I'll be fit again....Apply such situations to over forty million adults in the UK....mind you, it would create tens of thousands of jobs dealing with all the claims of temporarily altered circumstances.

It s the principle of our society that we all contribute to the common good proportionate to our means. So the lifelong fit and healthy support the chronic sick. The childless support those with families. The working young contribute to the retirement incomes of the old, because the SRP is essentially a Ponzi scheme, like NI as a whole.

Whether this principle is 'fair' or not is irrelevant since society cannot be structured to each individual's notion of what constitutes 'fairness'. What strikes me and most others as 'unfair' is when people deliberately try to avoid collective responsibility, either by abusing the benefits system or evading tax due.


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