WHERE TO PAY TAXES

Hi,

last year I became resident in spain so was informed that as

spain is now my permanent home I have to pay taxes here.

at the present moment our solicitor is doing our tax return

for us for 2010 which apparantly has to be completed and sent to

the tax office by 30th june.

yesterday I was talking to friends and was telling them about our

tax returns being done, my 4 friends are all resident and have lived here

from 5 - 20 years respectively,obviosly some longer than others.

all of them said they have NEVER  paid tax in spain and they all pay their taxes

in england. They are all pension age and they all have savings in the U.K. the same

as us.

can anyone tell me is it possible to pay your taxes in england when you live permanently

in spain.

 Yes ,you have a choice,even if you are resident here.

It is more advantagous to file in Spain though.

Georgia,

If the UK pension is a government pension - civil service or military - then it is taxed at source in the UK and does not have to be included in a Spanish tax return.  And there are minimum levels below which you do not have to file in Spain after the first return.  But I didn't think you could choose - 183 days in any calendar year and you're tax resident; matter of fact not matter of choice.  But I am happy to be corrected.  Can you provide a link to the government site confirming your statement please.  Spanish is fine.

And of course with no tax certificate they will not have exemption from capital gains tax when they sell their Spanish home.

I am a pensioner and all my pensions are paid and taxed in Britain,I then fill in a Spanish tax return including all earningd and taxes paid in Britain,this is then converted into Euros,and my British tax allowances are cancelled and replaced by spanish tax allowances.The Spanish office then work out how much I would of paid if all earnings and allowances were in Spainand I either pay the difference to the Spanish tax office or they give me a refund.

Sounds complicated but quite simple,in most years the payment or refund is very small.The tax for year 2010 is different for people like me who were 65 last year,as the British Dwp forgot to tell the relevant tax office of the extra money and no tax was deducted,so on completion of my tax return in Spain was much higher as they took the tax due,consequently I paid the tax in Spain that i would of paid in Britain for that pension.Then Britain decided to take the due tax again by taxing me again this year,consequently I am paying tax twice on my State Pension.This hopefully will be returned to me next year when my British tax will include the extra tax .there giving me ,hopefully,A rather large tax refund from Spain.

One disadvantage to paying Spanish taxes when you become 65,is the Tax free amount you are allowed before paying any tax is almost 10,000 pounds but in Spain your basic allowance is just over 6000 euros.

Jek

Here is a link that is in English, as it is the HM Revenue & Customs website!  http://www.hmrc.gov.uk/cnr/faqs_general.htm#4nr.  The answer to question 4 under tax seems to be quite clear.  You made a very good point too regarding capital gains tax.

Wizzard

It's not quite as bad as you say, regarding the over 65s.  My husband's tax allowances for 2010 were over 8700€ and even mine (I'm under 65) added up to 7803€.  I reckon that my tax bill here will be less than if I was still paying taxes in the UK.

Sue

hi georgia,

what are the advantages of filing our tax returns

in spain. I thought you were allowed a higher

personal allowance in england.

hi suemac,

can you tell me where you got your figures from.

ie-: over 65  allowance 8700 euros

    under 65 allowance 7803 euros.

THANK YOU

 Hi Formentera,

I am not sure to be Honest as my Renta is calculated on earnings and the fact  that my wife works full time on contract and i have children in Spain.

I just go on the pensioners that i know keep telling me it is better to declare here...my abogado explained it to me once but as it doesn't apply to me it went over my head!

I suppose it is dependant on every individual.

sorry thats not more helpful.

Hi Formentera Costa

We had a meeting with Äbaco Asesores, who gave us the figures for our allowances.  Personal allowance was 5151€, allowance for work related income (including pension) 2652€ and for John an extra allowance of 918€ for being over 65.  This was being assessed separately rather than as a married person, as it was more beneficial.

Sue

Hi Georgia,

thanks for the reply.

hi suemac,

thanks for the info

Georgia

I wouldn't go on what pensioners tell you (I know - I'm one!).  We were told by one pensioner friend that we wouldn't pay tax here if our income was less than 18000€!. I wish!  Even if we were taxed together, our joint allowances would have been less than that. The words salt and pinch come to mind!

Sue