# Tax on private pensions



## Debbib (Jun 15, 2013)

Hi, me & my husband are early retirees both have small private pensions which we pay tax on in the uk. We want to move to Spain permanently. Please can anyone tell me if we will be taxed on these twice in uk and again in Spain. Also is it possible to have our pensions paid directly into a Spanish bank account. Thanks in anticipation of your help.


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## jimenato (Nov 21, 2009)

Debbib said:


> Hi, me & my husband are early retirees both have small private pensions which we pay tax on in the uk. We want to move to Spain permanently. Please can anyone tell me if we will be taxed on these twice in uk and again in Spain. Also is it possible to have our pensions paid directly into a Spanish bank account. Thanks in anticipation of your help.


Hello.:welcome:

As I understand it, as you are staying permanently in Spain then you should declare any income from anywhere in Spain. You will not have to pay tax twice though, but it is possible that, if your Spanish tax calculations comes to more than you have paid in the UK, you might have to pay the difference.


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## VFR (Dec 23, 2009)

Debbib said:


> Hi, me & my husband are early retirees both have small private pensions which we pay tax on in the uk. We want to move to Spain permanently. Please can anyone tell me if we will be taxed on these twice in uk and again in Spain. Also is it possible to have our pensions paid directly into a Spanish bank account. Thanks in anticipation of your help.


You currently pay tax on them ?, cannot be that small then given the P/Allowance in the UK. 
Once you decide to live here & not the UK let HMRC know when you become a tax resident here and they will send you a form to submit to the tax people here, once the forms go back & forth and all are happy you will only be taxed here.
Yes you pension can be paid into a Spanish bank.

Mind you things are different should it be any form of UK government/local authority pension, in that case ask (in fact ask them anyway) HMRC.


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## Debbib (Jun 15, 2013)

Thanks very much for your reply it is very helpful


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## Debbib (Jun 15, 2013)

Again thank you very much for your helpful reply.


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## olivefarmer (Oct 16, 2012)

One point to note.

Pensions are taxed differently here depending on their type. Purchased Annuities have an attractive rate compared with say an occupational pension. The rate varies depending on age and when it/they were taken out.


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## Debbib (Jun 15, 2013)

Thanks for the info Olivefarmer.


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## 90199 (Mar 21, 2010)

If your pensions are Govt. pensions, they cannot be taxed anywhere other than the U.K. E.G. Emergency and security services pensions, prison services, N.H.S. etc. Unless you are a citizen of Spain.


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## Stravinsky (Aug 12, 2007)

Hepa said:


> If your pensions are Govt. pensions, they cannot be taxed anywhere other than the U.K. E.G. Emergency and security services pensions, prison services, N.H.S. etc. Unless you are a citizen of Spain.


The OP stated "private pensions" I think

The only comment I would make is that I would think carefully before having them paid directly into a Spanish Bank, because you lose control a bit of the rate of exchange used. State & Government pensions, you probably wouldnt do much better .... but private, I would go to someone like currencies direct. The money transfer companies generally give the best rates, and if you set up a regular transfer with some of them, you wont get any fees charged to you. Also, make sure your Spanish bank dont charge for incoming transfers. 

With accounts like Sabadell's Expansion, you get a bank account with no fees at all if you have a regular transfer going in.


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## jimenato (Nov 21, 2009)

Stravinsky said:


> The OP stated "private pensions" I think
> 
> The only comment I would make is that I would think carefully before having them paid directly into a Spanish Bank, because you lose control a bit of the rate of exchange used. State & Government pensions, you probably wouldnt do much better .... but private, I would go to someone like currencies direct. The money transfer companies generally give the best rates, and if you set up a regular transfer with some of them, you wont get any fees charged to you. Also, make sure your Spanish bank dont charge for incoming transfers.
> 
> With accounts like Sabadell's Expansion, you get a bank account with no fees at all if you have a regular transfer going in.


That's good info. I really,_ really_, should do it differently from the way I do it at the moment.


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## Stravinsky (Aug 12, 2007)

jimenato said:


> That's good info. I really,_ really_, should do it differently from the way I do it at the moment.




My pleasure
I had it set up so that I paid no charges anywhere (after falling foul of Banco De Valencia when I first moved here). I makes sense.

My challenge now is to get property funds back to the UK in the best possible way. The money transfer companies tell me I should buy forward NOW! Who knows


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## extranjero (Nov 16, 2012)

Debbib said:


> Hi, me & my husband are early retirees both have small private pensions which we pay tax on in the uk. We want to move to Spain permanently. Please can anyone tell me if we will be taxed on these twice in uk and again in Spain. Also is it possible to have our pensions paid directly into a Spanish bank account. Thanks in anticipation of your help.


As someone else said, if you're paying tax on them, no way are they small pensions!!
Wish my small pensions were as "small!"
Just ask HMRC- it's better to get your info from the horses mouth.


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## Aron (Apr 30, 2013)

Debbib said:


> Hi, me & my husband are early retirees both have small private pensions which we pay tax on in the uk. We want to move to Spain permanently. Please can anyone tell me if we will be taxed on these twice in uk and again in Spain. Also is it possible to have our pensions paid directly into a Spanish bank account. Thanks in anticipation of your help.


Once you move to Spain and become a tax resident, HMRC in the UK should gove you a NT tax code, which means you don't pay UK tax. Your pension company will be notified and you should receive it gross. You then declare that in Spain. That is how it works for us.


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## Aron (Apr 30, 2013)

Hepa said:


> If your pensions are Govt. pensions, they cannot be taxed anywhere other than the U.K. E.G. Emergency and security services pensions, prison services, N.H.S. etc. Unless you are a citizen of Spain.


That can depend on certain factors. Certain pensions with the post office can be taxed in Spain, some can't, but basically everything you have mentioned is correct.


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## Debbib (Jun 15, 2013)

Hi Stravinsky,
Thank you very much that's very useful info.


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## CapnBilly (Jun 7, 2011)

Stravinsky said:


> The money transfer companies tell me I should buy forward NOW! Who knows


When I used to deal in fx ( many many years ago), and people asked me about the rate, which they did every day, I used to tell them, it's not what you know that moves the rate (thats already factored in), its what you don't know. If they had exposure, I always used to advise them to cover half forward so they at least hedged the risk.


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## Stravinsky (Aug 12, 2007)

CapnBilly said:


> When I used to deal in fx ( many many years ago), and people asked me about the rate, which they did every day, I used to tell them, it's not what you know that moves the rate (thats already factored in), its what you don't know. If they had exposure, I always used to advise them to cover half forward so they at least hedged the risk.



Thats probably good advice


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## Debbib (Jun 15, 2013)

Thanks very much for all the helpful replies )


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## crookesey (May 22, 2008)

extranjero said:


> As someone else said, if you're paying tax on them, no way are they small pensions!!
> Wish my small pensions were as "small!"
> Just ask HMRC- it's better to get your info from the horses mouth.


This is the UK system, showing that 'small pensions' can be subject to taxation if State Pensions are sufficiently high.

If state pensions are say £10,000 each and private pensions are say £1,500 each, after deducting £10,500 Personal Allowances (age 65 to 75) both would be taxed on £1,000 at the 20% rate, younger people would receive a £9440.00 allowance each.


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## extranjero (Nov 16, 2012)

crookesey said:


> This is the UK system, showing that 'small pensions' can be subject to taxation if State Pensions are sufficiently high.
> 
> If state pensions are say £10,000 each and private pensions are say £1,500 each, after deducting £10,500 Personal Allowances (age 65 to 75) both would be taxed on £1,000 at the 20% rate, younger people would receive a £9440.00 allowance each.


1)I understand that the poster and husband do not have state pensions yet
2)How can a state pension ever be £10,000?


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## Stravinsky (Aug 12, 2007)

extranjero said:


> 1)I understand that the poster and husband do not have state pensions yet
> 2)How can a state pension ever be £10,000?


Correct, the basic state pension for a married couple is £220.10 a week, or £11440 a year


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## crookesey (May 22, 2008)

extranjero said:


> 1)I understand that the poster and husband do not have state pensions yet
> 2)How can a state pension ever be £10,000?


1) They must have private pensions of over £9440.00 each p/a to be paying tax.

2) Look up SERPS (State Earnings Related Pension Scheme), I was contracted out of SERPS for several, however my State Pension is currently £8,600 p/a and my contracted out benefits are just under £3,000 p/a.


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## crookesey (May 22, 2008)

Stravinsky said:


> Correct, the basic state pension for a married couple is £220.10 a week, or £11440 a year


A little knowledge can be a dangerous thing, why do you assume that everyone draws the basic State Pension?

The tables are there for all to see.


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## Stravinsky (Aug 12, 2007)

crookesey said:


> A little knowledge can be a dangerous thing, why do you assume that everyone draws the basic State Pension?
> 
> The tables are there for all to see.


You're making assumptions, and yes I have a good knowledge of state pensions, because I dealt with my wifes and researched my own (when I eventually get it.

The most that you can get from a basic state pension is £110.15 a week, or £5980 a year. I contracted out of SERPS as well, and that will gain me the princely sum of around £2400 a year, possibly, depending on the state of the markets when I take it. Not everyone opted out, so many people have their state pension, as above

Of course to even get to this point you need to have made the necessary contributions and satisfied the number of years of paying in to the system. For some, 30 years, and for others 44 years! So a 44 year qualifier would not get a full state pension if he had done 30 years contributions for instance

So .... in this case too many assumptions were made. We know nothing other than the original post yet have increased their pensions to £10k each. I'm sure they will be very pleased. Why do you assume they dont take the basic state pension by the way? We dont know.

A little bit of knowledge is not always a bad thing, but the ability to take in the big picture is extremely important


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## extranjero (Nov 16, 2012)

I didn't realise some state pensions are so generous!


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## crookesey (May 22, 2008)

So my 25 years as a pensions broker means nothing in comparison to your dealings with your wife's pension. You have all but called me a liar, whilst saying the strangest things about a subject that you obviously know very little about. You state that you contracted out of SERPS and will receive contracted out benefits, that is correct. You further state that people who don't contract out receive the basic state pension, totally wrong.

Might I suggest that you do a little more googling and a lot less pontificating.


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## Stravinsky (Aug 12, 2007)

crookesey said:


> So my 25 years as a pensions broker means nothing in comparison to your dealings with your wife's pension. You have all but called me a liar, whilst saying the strangest things about a subject that you obviously know very little about. You state that you contracted out of SERPS and will receive contracted out benefits, that is correct. You further state that people who don't contract out receive the basic state pension, totally wrong.
> 
> Might I suggest that you do a little more googling and a lot less pontificating.


Oh please, give me a break 
I'm only going on what ACTUALLY happens. I dont need to google anything. I didnt call you a liar, but I certainly seem to have touched a nerve with you.  

So with respect I suggest you forget your "holier than thou" stance. I used to be in the SAS you know, you wouldnt want to annoy me


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## crookesey (May 22, 2008)

Stravinsky said:


> Oh please, give me a break
> I'm only going on what ACTUALLY happens. I dont need to google anything. I didnt call you a liar, but I certainly seem to have touched a nerve with you.
> 
> So with respect I suggest you forget your "holier than thou" stance. I used to be in the SAS you know, you wouldnt want to annoy me


Idiot, you are still intimating that I am a liar, you need to learn to receive as well as to send.


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## Stravinsky (Aug 12, 2007)

crookesey said:


> Idiot, you are still intimating that I am a liar, you need to learn to receive as well as to send.


No .... no I'm not ... you are obviously suffering a sense of humour failure and sadly resorting to insults. May I suggest respectfully that we leave it there to save spoiling the OP's thread further


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## kurt85 (May 7, 2013)

Stravinsky said:


> No .... no I'm not ... you are obviously suffering a sense of humour failure and sadly resorting to insults. May I suggest respectfully that we leave it there to save spoiling the OP's thread further


hahaha, arguing about pensions!! its not as if theres enough arguments about petty stuff in this day and age!!  Good entertainment though guys


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## crookesey (May 22, 2008)

extranjero said:


> I didn't realise some state pensions are so generous!


According to Mail Online the UK has the worst state pensions in the EU. As a proportion of average working pay Greece comes out top at 95.70%, Spain is 81.20% whilst the UK's is 30.80%.

Not my figures before they are disputed, however my £8,600 p/a is 28.66% of my last years working pay, so perhaps not so generous after all.


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