# British pension implications...



## Hertsfem (Jun 19, 2013)

Can someone please tell me the implications of this? We have a pension paid out here to Tenerife each month but it's taxed in UK..


Spanish tax office sets sights on pensioners


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## 90199 (Mar 21, 2010)

One of my pensions is taxed in the U.K., the other O.A.P. is taxed here, I make a Spanish tax return each year here and declare all my pensions. Because of the double tax agreement between U.K. and Spain I do not get taxed by Spain on the one taxed in the U.K.

I don't think you need to worry.


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## Hertsfem (Jun 19, 2013)

Thanks I hope not...


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## extranjero (Nov 16, 2012)

Hertsfem said:


> Thanks I hope not...


You do not say whether your pension is a government pension, in which case it will be taxed in UK , although has to be declared on the Spanish declaration from 2015, I think. Previously they weren't declared at all.
All other pensions and income, including that from investments, savings interest etc has to be declared and taxed in Spain. Just google tax in Spain and you will get a huge amount of info.
As for that article, surely it's not a case of being misinformed by the HMRC , more a case of some expats not wanting to know about tax implications in Spain.
How can there be any excuse, when there's so much information about?


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## Lynn R (Feb 21, 2014)

extranjero;41154
All other pensions and income said:


> Just to add, because of the dual taxation treaty, any tax you have already paid in the UK will be offset against the tax due in Spain.


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## Hertsfem (Jun 19, 2013)

Thanks for that, ours is a private pension as we are not government pensionable age yet. 

So you mean we could be taxed twice?


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## xabiaxica (Jun 23, 2009)

Hertsfem said:


> Thanks for that, ours is a private pension as we are not government pensionable age yet.
> 
> So you mean we could be taxed twice?


not twice exactly

but if the allowance is lower in Spain then you would have to pay the difference here


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## extranjero (Nov 16, 2012)

Hertsfem said:


> Thanks for that, ours is a private pension as we are not government pensionable age yet.
> 
> So you mean we could be taxed twice?


No, because as Lynn said any tax you have paid will be set against the Spanish tax, but what you need to do is get a good accountant, who knows all about tax issues in Spain and Uk, and can apply to have your pension exempted from UK tax, so you only pay tax in Spain.


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## Lynn R (Feb 21, 2014)

Hertsfem said:


> Thanks for that, ours is a private pension as we are not government pensionable age yet.
> 
> So you mean we could be taxed twice?


Not taxed twice - but in certain circumstances, more tax might be due in Spain than the amount of tax paid on the same income in the UK (therefore you might still be liable to pay the difference).


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## Hertsfem (Jun 19, 2013)

I think when we retired we had the option of moving our entire pension to Spain but opted to keep it in UK. Thanks for your help. I guess an accountant will cost a bomb


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## xabiaxica (Jun 23, 2009)

Hertsfem said:


> I think when we retired we had the option of moving our entire pension to Spain but opted to keep it in UK. Thanks for your help. I guess an accountant will cost a bomb


it wouldn't have made any difference to the amount of tax paid though


a gestor could help with tax returns & they don't cost much at all

lots of people do them themselves, though


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## Hertsfem (Jun 19, 2013)

Thanks everyone


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## Hertsfem (Jun 19, 2013)

Will this affect those of us in the Canary Islands as well or is it just the mainland?

We appear to have a different tax regime here...


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## Lynn R (Feb 21, 2014)

Hertsfem said:


> I think when we retired we had the option of moving our entire pension to Spain but opted to keep it in UK. Thanks for your help. I guess an accountant will cost a bomb


It doesn't matter where the income comes from - residents in Spain are taxed on all their worldwide income, from any source. That has always been the case, so whether you transferred your pension or not wouldn't have made any difference.

If you're worried about the cost, it's possible to make an appointment at your nearest Hacienda office, go along and they will complete your tax return there and then online, free of charge. This has to be done before the end of June each year - same deadline as if you use a gestor or an accountant.


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## Hertsfem (Jun 19, 2013)

Hertsfem said:


> Will this affect those of us in the Canary Islands as well or is it just the mainland?
> 
> We appear to have a different tax regime here...



That's why I was asking if the same applies to the Canary Islands...


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## Lynn R (Feb 21, 2014)

Hertsfem said:


> That's why I was asking if the same applies to the Canary Islands...


So far as I know, the obligation to declare all worldwide income is national, affecting the whole of Spain, and the personal allowances are the same too. There are lots of differences between various autonomous regions about other allowances, though.


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## 90199 (Mar 21, 2010)

This year I used an accountant in Tenerife, cost for two 180€. I don´t use a gestor, they have given me wrong information in the past.


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## Hertsfem (Jun 19, 2013)

Thankyou Hepa...


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## extranjero (Nov 16, 2012)

xabiachica said:


> it wouldn't have made any difference to the amount of tax paid though
> 
> 
> a gestor could help with tax returns & they don't cost much at all
> ...


I think many would find the forms intimidating- do many really want to tackle them, plus accountants know how different pensions are treated in Spain. It's not for the faint hearted. The OP would do better to find himself a good accountant , butI have to say I 've been to several different accountants over the years, and they all made my tax very,very different, so how do you know that any of them are doing it correctly?


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## CapnBilly (Jun 7, 2011)

extranjero said:


> No, because as Lynn said any tax you have paid will be set against the Spanish tax, but what you need to do is get a good accountant, who knows all about tax issues in Spain and Uk, and can apply to have your pension exempted from UK tax, so you only pay tax in Spain.


No, that's the whole point of what they are doing as far as I can see. Unfortunately many professionals advise people incorrectly, and even perpetuate the problem. I' m sure I have posted about this before. Under the DTA, income is either taxed only in the UK (government pension etc), only in Spain, (state pension), or both (rental income). 

The DTA is quite clear, where income is taxable in both, then you can offset the amount paid, but only upto the amount due. In respect of Income which is taxable in Spain, there is no offset available, despite the fact that people do offset it. You are, as Extranjero posted, supposed to request it paid gross. 

Technically, they can go back 4 years, and ask you to pay the amount due, which you can then claim back from HMRC with no problem. They could also impose a fine, surcharge and interest, but the report implies they are not proposing to do that.


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