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I am a Republic Of Ireland EIRE passport holder and will be moving to Benidorm and I have been told I will need to pay tax on my pension which in most settings is tax free. Can anyone tell me if this is true and if so what % of tax
Many thanks
Terry
Pensions are taxed at the normal rate of income tax. You get the tax free allowance of €6700 a year (as you are over 65) plus there are other allowances depending on circumstances such as a low pay allowance, married allowance (though not simply added to your allowance) and so on.
Tax rates are then progressive depending on how much you earn. 19% for the first 6,000 above the tax free allowances, 21% for the next band up to 50,000 euro.
Be aware that bank interest and any other income derived from assets will also be classed as world wide income and will be taxable in Spain. Only government pensions are not taxed as they remain taxed in your own country. Government taxes are things like armed forces, civil service, firefighters etc.
Pensions are taxed elsewhere. It is that they are generally below the tax free allowance so you don't see tax coming off. They also add it to any other income in UK and it increases the tax you pay on that other income.
You need to inform the tax authorities in Ireland that you are now a resident in Spain so that they won't tax you on any other income in Ireland.
marcliff wrote on Sun Mar 3, 2024 11:12pm:
Pensions are taxed at the normal rate of income tax. You get the tax free allowance of €6700 a year (as you are over 65) plus there are other allowances depending on circumstances such as a low pay allowance, married allowance (though not simply added to your allowance) and so on.
Tax rates are then progressive depending on how much you earn. 19% for the first 6,000 above the tax free allowances, 21% for the next band up to 50,000 euro....
Read more...
...
Be aware that bank interest and any other income derived from assets will also be classed as world wide income and will be taxable in Spain. Only government pensions are not taxed as they remain taxed in your own country. Government taxes are things like armed forces, civil service, firefighters etc.
Pensions are taxed elsewhere. It is that they are generally below the tax free allowance so you don't see tax coming off. They also add it to any other income in UK and it increases the tax you pay on that other income.
You need to inform the tax authorities in Ireland that you are now a resident in Spain so that they won't tax you on any other income in Ireland.
So isn’t the British state pension classed as a government pension?
Presently I dont pay tax as my uk pension is below the basic Australian which is superior to UK
I have always paid tax in UK until I retired but never in Ireland as my business was in UK
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Posted: Mon Mar 4, 2024 6:40am
Super helpful member
Kelmenson wrote on Mon Mar 4, 2024 12:36am:
So isn’t the British state pension classed as a government pension?
Presently I dont pay tax as my uk pension is below the basic Australian which is superior to UK
Read more...
I have always paid tax in UK until I retired but never in Ireland as my business was in UK
No, the British state pension is not classed as a government, or crown, pension.
I find the Spanish tax system pretty fair considering the public services we receive in return. Marcliff's post above lays it all out. I wouldn't worry about it or let it put you off coming here. If you have a low or modest income, you will probably find you pay little or no income tax.
Posted: Mon Mar 4, 2024 7:43am
Super helpful member
Kelmenson wrote on Mon Mar 4, 2024 12:36am:
So isn’t the British state pension classed as a government pension?
Presently I dont pay tax as my uk pension is below the basic Australian which is superior to UK
Read more...
I have always paid tax in UK until I retired but never in Ireland as my business was in UK
The UK State Pension is not a Crown Pension and therefore taxable in Spain. The following link provides details of what are classified as Crown Pensions:
https://www.gov.uk/hmrc-internal-manuals/international-manual/intm343040
The following link contains a guide to taxation in Spain:
https://www.expatica.com/es/finance/taxes/taxes-in-spain-471614/
Herefordjack wrote on Mon Mar 4, 2024 6:40am:
No, the British state pension is not classed as a government, or crown, pension.
I find the Spanish tax system pretty fair considering the public services we receive in return. Marcliff's post above lays it all out. I wouldn't worry about it or let it put you off coming here. If you have a low or modest income, you will probably find you pay little or no income tax....
Read more...
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Thank you
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