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U.K. tax on Private Pensions - Page 3

Stephanie M K

Posted: Wed Jul 26, 2023 7:09pm

Posts: 36

26 helpful points

Location: Villena

Joined: 30 Jul 2022

Posted: Wed Jul 26, 2023 7:09pm

Joanie53 wrote on Wed Jul 26, 2023 2:09pm:

Do you receive state pension ? If yes it’s best to leave your private pension on U.K. tax  due to different allowances . The allowance in Spain is considerably lower so you’ll end up paying a lot more tax .

I declare my state pension here and pay Spanish tax , my private pensions are taxed at source in U.K. ,this is perfectly acceptable as a Spanish resident ...

...

,I use a tax consultant so I’m confident this is correct  I show evidence via P60 on private pensions so Spanish tax are fully aware and I’ve had no issues for 3 years .

Obviously if your private pension are your only income and your resident this would not apply 

Joanie53  

Suggest that you change your tax consultant.  

Marcliff has written a very cautionary and informative post giving details of  what needs to be declared in your Spanish tax return. Indeed you, yourself, sign off each page of your annual Spanish declaration to the affect that what has been declared, is in fact correct.   

Agencia Tributaria have several Investigations Departments.  They routinely audit Spanish tax returns.  

My husband was one of those picked by them in 2020 for a random audit of his Spanish tax return for the year 2016.  They enclosed in their recorded delivery letter the exact details of all of his pensions that they had received from HMRC.  (Brexit, by the way, has not changed the Double Taxation Agreement between Spain and the UK. Both still talk to each other )  

The Investigations Department required, within 10 days of signature of receipt of their letter, various documents that they stipulated.  Luckily. we keep each and every years taxation papers submitted for our Renta declaration in individual files.  We were able to supply them with the paper work that they requested.  

Three months later, my husband received a further recorded delivery letter from their Investigations Department to say that their investigation had been completed and no further action was required. 

marcliff

Posted: Wed Jul 26, 2023 7:57pm

marcliff

Legendary helpful member

Posts: 1768

2129 helpful points

Location: Rojales

Joined: 5 Jan 2023

Posted: Wed Jul 26, 2023 7:57pm

My neighbour was actually told by HMRC that his private pension, from the NHS, was not taxable in Spain. They sent him a letter to tell the Spanish tax authorities that. The Spanish tax authorities then sent him a letter with the HMRC overseas tax policy attached. My neighbour sent that to HMRC who then sent him a letter saying they had made a mistake and that it was only taxable in Spain.

He is still waiting for a tax refund from HMRC due to the fact the Spanish tax authorities took tax off him for 4 years and he is still paying tax in both countries. I think he's discounted any thought of having the amount of fines (350 euro a year for 4 years) in Spain reimbursed by HMRC because of their mistake.

Joanie53

Posted: Wed Jul 26, 2023 9:15pm

Posts: 58

13 helpful points

Location: Salinas

Joined: 13 Feb 2020

Posted: Wed Jul 26, 2023 9:15pm

marcliff wrote on Wed Jul 26, 2023 2:56pm:

No, it isn't. The only pensions that can be declared for taxes in UK are crown or government pensions. All other pensions, including the state pension, are taxed in Spain if you are a resident. As is interest received on bank accounts or dividends on shares.

Be careful. One of my neighbours was doing that and the Spanish tax authorities audited him and claimed taxes on those pensions going back 4 years (the longest they can do so) and issued him with hundreds of euros in fines for non payment. That meant he ended up paying 4 years of tax on his pensi...

...on in both UK and in Spain and is still trying to claim a refund from the UK HMRC after completing a belated FD9.

I've posted it before but the UK HMRC guidance on taxes in a different country are listed here

https://www.gov.uk/hmrc-internal-manuals/international-manual/intm343040

Only those marked government are taxable in UK, all others are taxed in your country of residence.

The person doing your taxes does so on the information you give them. Like my neighbour who informed them he was paying tax in UK on a private pension but still got fined with no comeback on the person doing the taxes as they only complete them on the instructions you provide.

Yes, you will end up paying more tax in Spain as the allowances are not so good. But that's a part and parcel of living here. 

I hope you don't get audited as paying tax in UK on private pensions whilst resident in Spain is not acceptable.

I find this all very concerning now !! I’ve sought help to complete tax returns ( on recommendation ) I’ve submitted all my pension information so totally transparent with relevant P60’s and received and paid my tax bills just waiting for this years to arrive , I’ve also spoken with HMRC as I was still paying tax in U.K. with State Pension included . They informed me I could get a rebate on any tax I’d overpaid . They did not advise that private pension should be taxed in Spain . 
I’m really concerned now as we believed we had it all sorted ie Spain tax on state pension U.K. on private pension now I haven’t got a clue 🤔☹️

Just read your link our private pensions are local government and Teachers so I think we’re ok 🤞

maggie42

Posted: Fri Jul 28, 2023 9:12am

Posts: 21

Location: Rojales

Joined: 29 Jun 2023

Posted: Fri Jul 28, 2023 9:12am

I would give then a phone call. Have found them very helpful on the phone. I have uk private pension and pay tax only in Spain. My UK tax code is NT and it always has worked fine

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Stephanie M K

Posted: Fri Jul 28, 2023 12:02pm

Posts: 36

26 helpful points

Location: Villena

Joined: 30 Jul 2022

Posted: Fri Jul 28, 2023 12:02pm

Joanie53 wrote on Wed Jul 26, 2023 9:15pm:

I find this all very concerning now !! I’ve sought help to complete tax returns ( on recommendation ) I’ve submitted all my pension information so totally transparent with relevant P60’s and received and paid my tax bills just waiting for this years to arrive , I’ve also spoken with HMRC ...

...as I was still paying tax in U.K. with State Pension included . They informed me I could get a rebate on any tax I’d overpaid . They did not advise that private pension should be taxed in Spain . 
I’m really concerned now as we believed we had it all sorted ie Spain tax on state pension U.K. on private pension now I haven’t got a clue 🤔☹️

Just read your link our private pensions are local government and Teachers so I think we’re ok 🤞

If you are certain that tax on them  are still to be paid in the UK then fine.   However they must still be declared on your Spanish annual tax return in the appropriate box provided.   This is the case in respect of my husbands Civil Service pension

Hacienda needs the TOTAL amount of your world wide income to enable them to evaluate the percentage of tax to be paid on your Spanish taxable income

He pays the appropriate percentage in respect of his UK OAP and 2 private UK pensions here to Spain

maggie42

Posted: Fri Jul 28, 2023 4:51pm

Posts: 21

Location: Rojales

Joined: 29 Jun 2023

Posted: Fri Jul 28, 2023 4:51pm

Stephanie M K wrote on Fri Jul 28, 2023 12:02pm:

If you are certain that tax on them  are still to be paid in the UK then fine.   However they must still be declared on your Spanish annual tax return in the appropriate box provided.   This is the case in respect of my husbands Civil Service pension

Hacienda needs the TOTAL amount of your world wide income to enable them to evaluate the percentage of tax to be paid on your Spanish taxable income...

...

He pays the appropriate percentage in respect of his UK OAP and 2 private UK pensions here to Spain

The only pensions taxed in UK are civil servant  pensions  ie  government, military, police etc.

Still have to be declared. 

All others have to be taxed in Spain

Wizzy2

Posted: Sun Aug 6, 2023 4:17pm

Wizzy2

Original Poster

Posts: 178

35 helpful points

Joined: 5 Mar 2020

Posted: Sun Aug 6, 2023 4:17pm

marcliff wrote on Tue Jul 25, 2023 6:19pm:

I don't think so as it sounds too easy. It's a long time since I did mine but I've gone through that link and moved on to the direct application which is here

https://sede.agenciatributaria.gob.es/Sede/en_gb/procedimientoini/G305.shtml

I think it was called a Certificate of Fiscal Residency - Convenio.

You have to submit the application from that link to get a clave. They then send you, by post, a letter (in Spanish) telling you how to register with a rather long code word (mix of letters and numbers). Once that is accepted, they send you, online, a 3 letter Code to enter with your NIE number. They then send the Certificate of Fiscal Resident to you on that link.

Every time you log in on that webpage with the same computer (it won't work with a different one) they just send a 3 letter code like an SMS from your bank.

Hope it works for you but I think the one you have just shows you are on the padron or census.

Marcliff just wanted to say thank you again for advice and to let you know that I now have the correct Tax Residency form Convenio after following your instructions. 

Wizzy

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