UK State pension

Whether you pay tax in Spain depends on your income from pensions and any other incomes you may have so not really an easy question to give an accurate answer to.

I would check on the gov.uk website to make sure you can qualify in line with the new financial and medical insurance requirements before worrying about taxes if you move to Spain.

We have been living in Spain for the past 2 and a half years we are now back home we did not pay any tax on our state pensions we didn't have any other income. The rules have changed now for you to be a resident in Spain your income has to be quite high compared to when we applied for residency we were still in the EU.

Thank you for your reply 

Hi,

To live in Spain permanently you will have to initially apply to the Spanish embassy while you are still living in the UK. You will need to apply for a non lucrative visa and be able to meet the income and healthcare requirements. 

Depending on what all your income adds up to over the financial year, ie, uk Pensions, private pensions and any additional income will determine the amount of tax paid (or not) here in Spain. When I came to live here I didn't pay any income tax for around 5 years. I paid some taxes this year because I was left a substantial inheritance. 

Steve 

Thank you Steve, we live in Portugal at the moment and haven't paid tax in the four and a half years we lived here. 

Assuming you can cross the financial and other hurdles now in place thanks to Brexit in terms of being allowed to live in Spain, you will be assessed for income tax based on your total annual worldwide income, including UK state pension.

The tax rates and allowances are easily researched on the internet to enable you to get a rough idea of how much you might be liable for.

Hi Trish,

If you´re a UK citizen and have a residence permit in Portugal, you may already know that it doesn´t give you the right to move to another EU country from 1 January 2021 without applying for a long-term visa and residency permit in the country you wish to move to, i.e. Spain.  Also, the years you have lived in Portugal can not be ´carried over´, so you will start from zero and have to live in Spain for 5 years before you accrue permanent residency.

The financial income requirements for a Spanish Non Lucrative Visa (NLV) application are around €34,000 per year for a couple.  The initial visa lasts 1 year, then you would apply for a renewal which lasts 2 years (and have to prove income of around €68,000 for the two year period); repeating the renewal process a second time would enable you to achieve 5 years living in Spain and ´residencia permanente´, after which you no longer need to apply for further visas.   Although you would not have protected rights under the Withdrawal Agreement (which you will currently have if you are legally resident in Portugal), the citizens´ rights section of the Trade and Co-operation Agreement does extend your ongoing right to UK State Pension uprating and S1 recipocal healthcare.

The base rate of income tax in Spain is 19% - see the section titled ´Personal Income Tax Rates´ at this link to see the full list:

https://taxsummaries.pwc.com/spain/individual/taxes-on-personal-income

All income derived from your worldwide assets (with the exception of ´Crown´ pensions and UK rental income) would be taxed in Spain, but there are many more personal allowances in the Spanish system, so you should seek professional tax advice to understand what you tax liability is likely to be if you become resident in Spain.

Kind regards,

Kim

Thanks very much Kim, it all seems very complicated to me. We will look into it.