Income tax moving to Spain

Mobat wrote on Sun Aug 28, 2022 10:04am:

Hi all, we are planning to move to Costa Blanca next year permanently.  Expect to move initially in Feb 23 with NLV.  I understand Spanish taxes can be a bit tricky and may need specialist input but just wondered if anyone had any advice in relation to following.  I intend to cease...

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... work end of Dec 22 and therefore no employment related income for the Spanish tax year 23/24. However it's possible that a tax free lump sum relating to my employment up to 22 could be paid shortly after I cease employment and taking into account Xmas and NY this could be paid in Jan 23.  My intention really is to be as honest as possible so question is could that lump sum if paid say 3,4 Jan 23 be liable for Spanish tax year 23/24 even though it relates to employment only up to 22.  Hope that makes sense and appreciate any advice.  Thanks.

Herefordjack wrote on Sun Aug 28, 2022 10:31am:

Steve is correct, even if it is paid to you on Jan 1st, 2023, it will be considered as part of your 2023 income, and taxed accordingly. Somewhere around the 20% mark or a bit more.

My advice is to check if there are any options to get it paid sooner or, if not and if you don't need it to purchase property for example, see if you can you leave it in the pension pot to have an enhanced pension....

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Mobat wrote on Sun Aug 28, 2022 10:48am:

Thanks for the feedback.  Yes aware of the Modelo Steve and my intention is to be fully honest when it comes to completing that but also want to minimise any complicating factors before it's required if I can. Think I will discuss with my employers when to cease work this year to ensure all ...

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...final payments are made in 22 leaving me with a clean slate so to speak when completing the Modelo for 23/24 which should then just cover savings and pensions which will be all assets then I guess.  Thanks

Mobat wrote on Sun Aug 28, 2022 10:48am:

Thanks for the feedback.  Yes aware of the Modelo Steve and my intention is to be fully honest when it comes to completing that but also want to minimise any complicating factors before it's required if I can. Think I will discuss with my employers when to cease work this year to ensure all ...

Read more...

...final payments are made in 22 leaving me with a clean slate so to speak when completing the Modelo for 23/24 which should then just cover savings and pensions which will be all assets then I guess.  Thanks

Mobat wrote on Sun Aug 28, 2022 10:48am:

Thanks for the feedback.  Yes aware of the Modelo Steve and my intention is to be fully honest when it comes to completing that but also want to minimise any complicating factors before it's required if I can. Think I will discuss with my employers when to cease work this year to ensure all ...

Read more...

...final payments are made in 22 leaving me with a clean slate so to speak when completing the Modelo for 23/24 which should then just cover savings and pensions which will be all assets then I guess.  Thanks

DEP003 wrote on Mon Aug 29, 2022 8:16am:

You wont have to pay any tax on a one off lump sum pension unless you are a resident in Spain before it is paid out.  Should that be the case than you wont be entitled to the 25% tax free but will be taxed on all of it at the rate of 21%.  You can however then claim any tax back paid to...

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... HMIC.

Best thing to do is get your payment first before applying for Residency.  As long as it doesnt exceed €50,000 then you'll be OK and wont need to declare it.