# Tax Allowances



## TheWadeFamily (Oct 3, 2012)

Hello. I'm running some numbers prior to our move to Spain. I know nothing is set in stone and things are subject to change etc, however, any help would be appreciated at this time.

I understand my tax free allowances are as follows:
Personal Allowance: €5.151
Family Allowance (spouse)	€3.468
First Child €1.836
Second Child €2.040

Total (so far) €12.495

Our children will be 3 in May'13 so I understand the maternity allowance isn't applicable as our current move date is Septeber 2013. 

The last 3 years my P60 income was about £48,000, at the latest exchange rate that's about €61.000 which puts me in the 47% bracket (53.407-120.000). 

I'm struggling to find information on what else I can put in that top bit to increase my tax allowance. I do travel around Europe for work and I have seen a tax break of up to €60.100 per year for this although I'm not sure what is allowed in this.

Is a mortgage and/or rent tax deductible? Any insurance policies, payments to local authorities for "council tax" and water rates (I understand water is included with "council tax" in some areas).

It's quite a bit to take in, I don't really understand UK tax so I'm really out of my depth! If anyone has a sample tax return or an excel spreadsheet that would be really useful!


----------



## CapnBilly (Jun 7, 2011)

TheWadeFamily said:


> Hello. I'm running some numbers prior to our move to Spain. I know nothing is set in stone and things are subject to change etc, however, any help would be appreciated at this time.
> 
> I understand my tax free allowances are as follows:
> Personal Allowance: €5.151
> ...


In addition to the personal allowance you get an earned income allowance of between €2,652 and € 4,080 on a sliding scale between income of €9,080 and €13,260, so you will get an additional €2,652.

In spain, like the UK, taxation is individual, but unlike the UK, you can elect to submit a joint return if it is more beneficial. The allowances (children etc) are split between couples, so 50%. If you elect to submit a joint return then the spouse allowance is € 3,400 plus half the childrens allowances, plus the mortgage allowance ( see below). However, the way allowances are deducted is complicated. The spouse allowances (€3,400 plus 50% of the children) is deducted from the total, your tax is then calculated, and the tax on your allowances at the basic rate is deducted. This is so a couple does not benefit from higher taxation relief. In addition, the tax rates are on a sliding scale, after deductions.

Upto 17,007 -24.75%, 17,007 - 33,007 -30%, 33,007 - 53,407 -40%, 53,407 - 120,000 - 47%

On the basis of the income you quote, I estimate the tax will be about €11,600, which I calculate that this more or less the same as you would pay in the UK.

In terms of rent, you can only set against tax if your income is less than €24,000. You can claim upto €9,015 for mortgage interest relief, but only at a rate of 7.5%.( think its 7.5% this year-it was 15% last year. Note, this is being scaled out). It was announced in this years budget that it would only be allowed if your income was below €24,000, but they seem to removed this in the last statement.


----------

