Will We have to pay Taxes?

Movingon wrote on Wed Jul 22, 2020 8:53pm:

Yes, you will pay taxes in Spain, and quite possibly more than you may be bargaining for.

"Local Government" is not really enough to say whether it's a Crown pension which is taxable only in the UK but even if it is it must still be declared in Spain gross where it will be used to work out your total tax burden with credit then being given for tax paid in UK. Unfortunately because the...

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... system here is less generous than in UK that can actually result in a larger tax bill than if it could be ignored as tax paid.

I don't know the sums involved of course but your comment "My husband will have a local government pension & we have some savings also to live on." comes across as a little worrisome.

After Dec 31st. and for the non lucrative visa you will have to demonstrate an income of 4x IPREM (Spanish minimum income) for the first person plus 1x IPREM for the second - depending on whether you base that on 12 months or 14 (as it works in Spain), in round numbers that amounts to an income of €32,000 or €37,000 or an equivalent amount in the bank.

For the 2nd year renewal you will have to show the same and again for a second 2 year visa to take you to the 5 years required for permanent residency after which you will not be asked to prove your income again.

If you don't have the funds to comply with those demands then your renewal applications will be rejected.

On the face of it unless extremely generous it sounds like "a local government pension" and "a little interest on our savings" may not be enough to cut it.

Lindsayb2107 wrote on Wed Jul 22, 2020 9:26pm:

Hi,

Thanks for the info & apologies if I confused things. I am aware of the income issue & we are fine for that & can demonstrate we will meet the criteria each year required. My husband's pension is from our local council where he still works until early next year when he will retire.

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For the taxes, will this be on interest generated on our savings? We won't be taxed on the actual amount we have will we, as this has already been taxed in the UK via my tax code & actual tax charged in our account over the years we have built it up.

jimtaylor wrote on Thu Jul 23, 2020 5:15am:

Check to ensure the LA pension is taxable in the UK:

https://www.costablancaforum.com/area/almorad%C3%AD-spain-11/taxes-suma-nie-tax-advice-in-almorad%C3%AD-25/jims-guide-non-resident-tax-part-1-theory-no-rental-income-75479/

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Also read my other guides about tax.

All other income is taxable in Spain, but tax isn't levied on assets like bank balances, as there's a very large allowance before wealth tax becomes due.

If you have assets in the UK of more than €50K in any of three categories - bank accounts etc, property, or shares - you have to notify these on Modelo 720, but this is informative only.

Lindsayb2107 wrote on Fri Jul 24, 2020 11:49am:

Thanks so much for the advice Jim, that's really hrlpful. I'll check out your guides too. I am also checking out the healthcare costs too, as I've read that it could be significant, as we are both a number of years away from state pensions. Would you know what the average costs are & if we co...

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...uld buy basic cover for acceptance for a visa! 

Thanks in advance for any advice you can give us.

jimtaylor wrote on Fri Jul 24, 2020 12:17pm:

I don't know myself, but click the advert for Gran Alacant Insurances on the right, then talk to Alfonso. He's got a superb reputation for helping people.