# Pension



## terry3197 (Sep 4, 2013)

Hi,
I am in receipt of a yearly pension appox 16,500 a year I am looking at moving out to Spain no real area at this time a few question, which hopefully will give me some idea of were I go from here 


How much tax do you pay on your pension in Spain ?

who do you pay your tax to ?

Is it better to get it sent to a Spanish account ?

Any other advice to with my pension would be great !!


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## 90199 (Mar 21, 2010)

I have two pensions, O.A.P. and a government pension, the government pension is taxed at source in the U.K., no choice in that matter. The O.A.P. falls under the Spanish system, but because it is so low, I do not pay any tax on that.

The local Spanish tax office complete my tax returns for me with no charge.

My pensions are paid into U.K. banks and I keep my eye on the exchange rates, when they are in my favour, I transfer a lump sum to my Spanish account, I do this through a currency exchange firm in London, (there are many) on 3000 and above they do not charge any commission and the exchange rates are far superior to banks, usually about 1 & 1/2 pence under the financial times rate.

You would survive easily on your pension here in the Canary Isles,

Best of luck with your plans.


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## thrax (Nov 13, 2008)

Hi and welcome to the forum. Your pension should be plenty to allow you a comfortable life if not extravagant. Are you coming here on your own or with a partner? To get residency you now require to prove income which equates roughly to around €650 per person per month (it seems to vary from area to area) and also you have to have healthcare in place. If you are receiving your state pension in UK then that is not a problem as you automatically qualify for health care in Spain. The are you choose is extremely important so the fun bit is having several holidays in different places to see where suits you best. Coast, inland, ex-pats available or not, village, town, city or campo. Will you need a car? Internet (probably) and will you be renting (preferable for the first 1 - 2 years in my opinion) or buying?

As Baldi said your pension, unless it is a government pension, will and should be taxed here in Spain once you have become tax resident - after 183 days. Lots of things to find out but that is why this forum exists. We might not have all the answers, but we do have a lot of them...


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## bob_bob (Jan 5, 2011)

Another vote for the Canary Isles, no winter to deal with unlike mainland Spain.


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## extranjero (Nov 16, 2012)

bob_bob said:


> Another vote for the Canary Isles, no winter to deal with unlike mainland Spain.


Why don't more people retire there, although Hepa may not like too many invading his paradise!


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## 90199 (Mar 21, 2010)

extranjero said:


> Why don't more people retire there, although Hepa may not like too many invading his paradise!



There are many retirees on the larger Islands, many from the British Isles and other northern European countries. 

Few here though, transport difficulties, language and cultural differences tend to put many people off the island, plus the fact that it is very quiet, with little entertainment or night life.


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## Aron (Apr 30, 2013)

terry3197 said:


> Hi,
> I am in receipt of a yearly pension appox 16,500 a year I am looking at moving out to Spain no real area at this time a few question, which hopefully will give me some idea of were I go from here
> 
> 
> ...


Everybody have their own opinions of which is the best way to deal with your pension. My wife and I have our state pension and I have my company pension. We have them sent directly into our Spanish bank account. You get the top rate on the day, there are no charges and in my opinion it is by far the best way, but as I said, others have a different point of view. You must work out what you feel is best for you, not what is best for any of us.

How much tax do I pay, can't remember. I have a great gestor and we pay less in total than we did in the UK. I am happy with that.


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## CapnBilly (Jun 7, 2011)

terry3197 said:


> Hi,
> I am in receipt of a yearly pension appox 16,500 a year I am looking at moving out to Spain no real area at this time a few question, which hopefully will give me some idea of were I go from here
> 
> How much tax do you pay on your pension in Spain ?
> ...


Assuming its not a government pension, then you will get a personal allowance of €5151 ( €6069 if you're over 65) and an earned income allowance of €2652. You will then pay tax on the difference, it can vary slightly depending upon the province you move to, but it's currently about 24.75%. If you're married you can submit a joint return, and you get an extra allowance of €3400. If you partner earns more than €3400, then its better to submit a separate return.


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## Alex S.A-UK-PT (Oct 15, 2013)

It seems something the UK is not advertising much is 'A-Day'. I guess no government wants people to leave the country and take their money with them. ive recently moved to portugal and did some research into things like pensions and investments and taxes for my in-laws. there is a company based in algarve near where i live who help people to bring over their pensions to portugal or spain etc. the taxes are far less than the u.k and inheritance tax can be avoided too. uk taxes about 55% of your estate when you die rather than it all going to your family members. your pension only gets taxed about 11% of 15% of the entire figure rather than getting the lot taxed. I dont know why people still live in the uk!you can retire abroad in a beautiful country thats cheaper to live in and you get to keep more of your money... i guess thats why it isnt advertised.


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## Stravinsky (Aug 12, 2007)

Alex S.A-UK-PT said:


> It seems something the UK is not advertising much is 'A-Day'. I guess no government wants people to leave the country and take their money with them. ive recently moved to portugal and did some research into things like pensions and investments and taxes for my in-laws. there is a company based in algarve near where i live who help people to bring over their pensions to portugal or spain etc. the taxes are far less than the u.k and inheritance tax can be avoided too. uk taxes about 55% of your estate when you die rather than it all going to your family members. your pension only gets taxed about 11% of 15% of the entire figure rather than getting the lot taxed. I dont know why people still live in the uk!you can retire abroad in a beautiful country thats cheaper to live in and you get to keep more of your money... i guess thats why it isnt advertised.


I'm not even sure what you are basing this on, as you seem to be in Portugal and are a little confused about UK IHT.

The allowances are quite large in the UK (£325,000) so you dont pay 55% of your whole estate at all!!! I believe the base rate over that would be 40%, but most people with any sense will have taken care of that, if indeed it effects them.

In Spain for instance, the allowance is about €16000 per beneficiary with sliding rates so in effect for the same figure you might well end up paying more taxes than in the UK

With your pension, you've probably had to buy an annuity, so all the unprotected money goes straight to the insurance company!!

Please dont advertise the company, as a newbie it would seem a little Spammy


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## Alex S.A-UK-PT (Oct 15, 2013)

sorry, i havent got the exact details, it was a lot to try take in. the figures were something like that. but from what i can gather its still pretty good for tax and pension purposes as well as the high return investments rather than leaving money in the uk banks for less than 3% p.a. I'm not gona advertise the company though, unless they want to pay me for free marketing. lol. i was just surprised that people could actually do this. the people i know still leave their pensions in the u.k not realizing they could actually go through this process. seems like a government cover-up of sorts. it's all business i guess. i was only here trying to uncover if any of the users have had experience doing this before. i havent seen any so it would be wrong not to get them to investigate it for themselves.


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## Stravinsky (Aug 12, 2007)

Alex S.A-UK-PT said:


> sorry, i havent got the exact details, it was a lot to try take in. the figures were something like that. but from what i can gather its still pretty good for tax and pension purposes as well as the high return investments rather than leaving money in the uk banks for less than 3% p.a. I'm not gona advertise the company though, unless they want to pay me for free marketing. lol. i was just surprised that people could actually do this. the people i know still leave their pensions in the u.k not realizing they could actually go through this process. seems like a government cover-up of sorts. it's all business i guess. i was only here trying to uncover if any of the users have had experience doing this before. i havent seen any so it would be wrong not to get them to investigate it for themselves.


There are lots of ways of maximising your tax, and many of them are very iffy. QROPS was the last one that was pushed a lot (which I'm assuming you are referring to) , but thats under investigation and you have to be careful not to break the HMRC rules. UK limited companies fopr property ... all kinds of things, but the bottom line is if you are comparing Spanish IHT against British IHT then for an average expat, British is more beneficial

UK Government pensions can ONLY be taxed in the UK at the moment


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## mrypg9 (Apr 26, 2008)

There are many unscrupulous and unregulated companies that give advice on 'releasing' your UK pension funds.
We had a post recently from someone who 'released' his pension.
HMRC have demanded a huge percentage - 55% I think it was - of the total value of the pension fund as this scheme was in clear breach of HMRC rules.


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## extranjero (Nov 16, 2012)

Alex S.A-UK-PT said:


> It seems something the UK is not advertising much is 'A-Day'. I guess no government wants people to leave the country and take their money with them. ive recently moved to portugal and did some research into things like pensions and investments and taxes for my in-laws. there is a company based in algarve near where i live who help people to bring over their pensions to portugal or spain etc. the taxes are far less than the u.k and inheritance tax can be avoided too. uk taxes about 55% of your estate when you die rather than it all going to your family members. your pension only gets taxed about 11% of 15% of the entire figure rather than getting the lot taxed. I dont know why people still live in the uk!you can retire abroad in a beautiful country thats cheaper to live in and you get to keep more of your money... i guess thats why it isnt advertised.


You are joking-the inheritance tax is an absolute nightmare! Spouses have to pay it on their husband's assets , unlike UK.Any measures to avoid it have serious drawbacks.
Did you also know that ANY money you receive from UK or other countries eg pension pots, inheritances, matured insurances,savings plans,house sales etc is taxed in Spain, even though they would have been tax free in UK?
Get to keep more of your money?-that's a laugh, the taxman will squeeze you more and more in Spain.


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## mrypg9 (Apr 26, 2008)

extranjero said:


> You are joking-the inheritance tax is an absolute nightmare! Spouses have to pay it on their husband's assets , unlike UK.Any measures to avoid it have serious drawbacks.
> Did you also know that ANY money you receive from UK or other countries eg pension pots, inheritances, matured insurances,savings plans,house sales etc is taxed in Spain, even though they would have been tax free in UK?
> Get to keep more of your money?-that's a laugh, the taxman will squeeze you more and more in Spain.


That is all true...although I think it's a price worth paying for living in Spain.

As you know, extranerjo!!!!


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## baldilocks (Mar 7, 2010)

Much depends on where you are domiciled. If you are in Andalucía, inheritances passing to a spouse are invariably almost, but not quite, tax free (Unless your estate is huge). 

It is important to make a will in Spain dealing with your assets in Spain (make a separate on in UK for assets located there) exercising your right to have the will made in accordance with the law of your country of origin (e.g. UK) then you can choose who you leave your fabulous (or otherwise) fortune to. Under Spanish law you have strict rules that decide to whom and how much you can leave (you can't disinherit an ungrateful offspring but you can under UK law).


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