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04 Jun 2014 10:07 by Seashells Star rating in Suffolk / Limaria. 81 posts Send private message

We are moving to the Almeria region in 10 months,and now is the time to start checking on forms and things I need to do. We already have a property ( 5 years now ) and our NIE numbers, but knowing Spain there must be lots of forms we still need to have filled in. One thing that confuses me is our pensions and taxing of said pension. In England when I retire, I will not be paying tax on it because the allowance is higher than my pension £8000. But on this double tax scheme, the Spanish allowance is only 6000 euros. I already pay non residents tax, this would work out cheaper per year to carry on with and stay a non resident. Could someone help with the forms, an explaination of pension tax, and what benifits i will get by becomming a resident rather than staying a non resident.    Help please





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04 Jun 2014 10:45 by bobaol Star rating. 2257 posts Send private message

bobaol´s avatar

There have been lots of discussions on this. The main thing is, if you are coming to live in Spain you cannot remain a non-resident. Any stay of more than 183 days (6 months) make you a resident in Spain for tax purposes. 

Although you pay non-resident tax at the moment you will also be paying non-resident banking fees including the bi annual non-resident certificate fee so you will probably find it less if you have to pay income tax.

I'm sure you'll get answers however, in our case, we get between us pensions of around £9,000 a year and pay no income tax in Spain on that. When I worked it out myself I came up with a figure of around €600 a year to pay in tax but I use someone to do my tax return for me and it has come out as zero liability so always best to pay someone to do it for you as they will know the ins and outs of the system. I pay €135 a year to our solicitors to handle everything including my tax return which is less than I was paying in bank charges and non-resident tax plus the saving of €600 a year income tax which I calculated would be my liability so worth doing.

 

 





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04 Jun 2014 10:49 by Mickyfinn Star rating in Spain and France. 1839 posts Send private message

It depends on your overall financial situation, if you own a UK property what savings or investments you have. My best advice is when you come to Spain go and see a good Spanish tax accountant who really knows Spanish tax laws and get their advice.

Avoid gestorias who can be useful for some things but tax is not one of them in my view.  



_______________________
Time is the school in which we learn Time is the fire in which we burn. Delmore Schwartz.



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04 Jun 2014 10:53 by Seashells Star rating in Suffolk / Limaria. 81 posts Send private message

Thank you Bobaol and Mickyfinn, I will look into it.





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04 Jun 2014 10:58 by Mickyfinn Star rating in Spain and France. 1839 posts Send private message

Bobaol.

I'm not being provocative here but £9k between you and your wife seems quite a low income to live on in Spain. Sometimes if a declared income is too low the Hacideda will query it believing it's impossible to survive on and other income is being hidden. Not suggesting that either in your case.

Do you find that level of income provides all your needs?



_______________________
Time is the school in which we learn Time is the fire in which we burn. Delmore Schwartz.



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04 Jun 2014 14:49 by bobaol Star rating. 2257 posts Send private message

bobaol´s avatar

I should have said declarable income. At the moment that is simply my NHS pension and my OH's minimal state pension. My Army pension is not declarable (and is what we actually live on here) and I don't get the state pension until next year.

However, as £9000 a years is almost €1,000 a month I would think it quite possible to live pretty well. If I add up all we spend then I don't think it would come to that much. I know plenty of people here who only get the state pension and manage quite well especially if there is no rent or mortgage to pay. 

 

 





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04 Jun 2014 15:20 by camposol Star rating in Camposol. 1411 posts Send private message

Bobaol- next year your army pension will be declarable, and will be used to work out your tax base in Spain, even though you pay income tax in UK





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04 Jun 2014 16:15 by bobaol Star rating. 2257 posts Send private message

bobaol´s avatar

Thank you for reminding me, camposol. I was aware of that. So will my state pension. I could end up wiping out the Spanish national debt all on my little ownsome. 





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04 Jun 2014 16:52 by camposol Star rating in Camposol. 1411 posts Send private message

Never mind, just think of all that lovely lolly when you get your SP. I'd spend it all and leave none for the Hacienda to get it's hands on when you pop off to that great urbanisation in the sky





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04 Jun 2014 18:41 by bobaol Star rating. 2257 posts Send private message

bobaol´s avatar

Huh! Natwest are already doing their best to ensure I have nothing to leave anyone. My fixed rate savings bonds mature this month and they have changed it such a derisory amount that I feel like I've been mugged.

Might as well stick it under the mattress.  





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04 Jun 2014 18:46 by camposol Star rating in Camposol. 1411 posts Send private message

When the Hacienda has had its cut of the profits you will definitely feel you've been mugged!





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04 Jun 2014 18:46 by camposol Star rating in Camposol. 1411 posts Send private message

When the Hacienda has had its cut of the profits you will definitely feel you've been mugged!





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07 Jun 2014 12:15 by Seashells Star rating in Suffolk / Limaria. 81 posts Send private message

Interesting as it is, my original question was, could someone tell me what I need to do regarding forms and notifications. Myself and my wife will be retiring to Spain in May next year, we do already have a property out there and our NIE numbers. I would like to be in advance of myself and have health forms, tax forms etc, who do I tell we are now here to live ( the council, the police ? ) These are the sort of issues I need your help on. thanks





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07 Jun 2014 12:31 by johnzx Star rating in Spain. 5241 posts Send private message

Seashells,¡.   As you are clearly 'not impressed' with the answers, may I suggest you spend a few Euros and take professional advice. It may not be correct but at least you will not be blaming us for not answering your question  !





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07 Jun 2014 12:51 by camposol Star rating in Camposol. 1411 posts Send private message

Inform DWP, HMRC, NHS before you leave UK

After 90 days sign on the foreigners register at the police station

Sign on the padron at the local town hall

Change your Uk driving licence to Spanish

If you have a UK car, reregister it to Spanish plates- not cheap.

After 183 days register on the Spanish tax system via an accountant familiar with the tax system in the UK and Spain, who will then arrange exemption from UK tax.

You will pay income tax on  incomes, rental, pensions, except government,( still has to be declared in Spain, though) savings investments  etc from wherever they originate.

You will pay capital gains tax in Spain, on pension lump sums, inheritances, winnings , profits on property sales from the UK, even if they  are tax free there.

Inheritance tax is on the person, not estate as in UK, so a spouse will pay inheritance tax on the deceased's assets. There is a tiny state allowance, and different regions have their own allowances, some have abolished them, meaning a huge amount of tax on the deceased's worldwide assets.





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07 Jun 2014 12:51 by camposol Star rating in Camposol. 1411 posts Send private message

Inform DWP, HMRC, NHS before you leave UK

After 90 days sign on the foreigners register at the police station

Sign on the padron at the local town hall

Change your Uk driving licence to Spanish

If you have a UK car, reregister it to Spanish plates- not cheap.

After 183 days register on the Spanish tax system via an accountant familiar with the tax system in the UK and Spain, who will then arrange exemption from UK tax.

You will pay income tax on  incomes, rental, pensions, except government,( still has to be declared in Spain, though) savings investments  etc from wherever they originate.

You will pay capital gains tax in Spain, on pension lump sums, inheritances, winnings , profits on property sales from the UK, even if they  are tax free there.

Inheritance tax is on the person, not estate as in UK, so a spouse will pay inheritance tax on the deceased's assets. There is a tiny state allowance, and different regions have their own allowances, some have abolished them, meaning a huge amount of tax on the deceased's worldwide assets.





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07 Jun 2014 13:20 by johnzx Star rating in Spain. 5241 posts Send private message

Camposol :   After 90 days sign on the foreigners register at the (National) police station in the area where you are living

After 183 days register on the Spanish tax system via an accountant familiar with the tax system in the UK and Spain, who will then arrange exemption from UK tax.

You will pay income tax on  incomes,

 

True,    unless you come to Spain  to move here permanently.  In which case you must register on the EU Citizens Register immediately ,   and you will become tax resident immediately on your worldwide assets.

On the income note:  If you retain a (second) property in UK (or anywhere else in Spain or outside)  you will pay ‘income tax’ on the value of it, which has nothing to do with letting it or not.  Just on, owning it.

Also, you do not need an accountant to set up your tax situation.  Just inform HMRC. They will send you some paperwork which you take to Hacienda (Spanish tax office) and they will liaise.





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07 Jun 2014 14:52 by Seashells Star rating in Suffolk / Limaria. 81 posts Send private message

Thank you Johnzx and Camposol for your more than helpful replies. Johnzx, on my previous message I was referring to 2 members talking mainly about pension monies and savings, your replies was what I was looking and hoping for.

Thanks





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DISCLAIMER:  All opinions posted on these message boards are the opinion solely of the poster and do not necessarily reflect the opinion of Eye on Spain, its servants or agents.


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