Civil Service Pensions - Page 3

costamar wrote on Thu Mar 9, 2023 8:21pm:

Hi everyone, I would like to ask this in case anyone knows. A friend of mine and myself we live in Spain.  In the past, we worked for  a UK government department, and because of that employment, we have started receiving a “civil service pension“ (a “UK government pension”...

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...). We are  Spanish nationals by origin.  But we also have UK citizenship through naturalization.  We are a bit confused… is this UK government pension taxed in the UK... or in Spain... or in both countries?  Because we have the two nationalities we do not know how it applies to us.  Many thanks for any suggestions. Kind regards.

Steveyjoanna wrote on Fri Mar 10, 2023 10:25am:

UK government pensions ,civil service,military etc,come under the dual tax agreement ,in force before and after Brexit,no change.Taxed at source and therefore exempt from paying tax in Spain.It has to be declared on Spanish tax form but is not taxable.You have to monitor the Spanish Gestors etc a...

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...s many are unaware of this Europe wide agreement between all countries and if you are not careful you could end up paying unnecessary tax.Doesnt matter what nationality you are it is the pension and it's source ,to repeat the UK government pensions are taxed at source and therefore included in the double tax agreement operated by all the EU ,in this case ,including UK.It is all online.

GrahamLynn wrote on Fri Mar 10, 2023 11:33am:

Just to pick your brain - so if you had a small civil service pension under UK  threshold  so not actually paying tax, but then also have a UK state pension , which requires you to pay tax in Spain.

Do you pay Spanish tax on just the amount of your state pension 

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Lynn

GrahamLynn wrote on Fri Mar 10, 2023 11:33am:

Just to pick your brain - so if you had a small civil service pension under UK  threshold  so not actually paying tax, but then also have a UK state pension , which requires you to pay tax in Spain.

Do you pay Spanish tax on just the amount of your state pension 

Read more...

Lynn

Steveyjoanna wrote on Fri Mar 10, 2023 10:25am:

UK government pensions ,civil service,military etc,come under the dual tax agreement ,in force before and after Brexit,no change.Taxed at source and therefore exempt from paying tax in Spain.It has to be declared on Spanish tax form but is not taxable.You have to monitor the Spanish Gestors etc a...

Read more...

...s many are unaware of this Europe wide agreement between all countries and if you are not careful you could end up paying unnecessary tax.Doesnt matter what nationality you are it is the pension and it's source ,to repeat the UK government pensions are taxed at source and therefore included in the double tax agreement operated by all the EU ,in this case ,including UK.It is all online.

costamar wrote on Sun Apr 30, 2023 8:30pm:

Hi Steveyjoanna,

Thanks for the explanation. I have had a look at the double tax treaty, and it actually says that you have to take into account the "nationality" of the person. If you live in Spain and you are a British national, the UK government pension is only taxed in the UK. If you live in Spain and you are...

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... a Spanish national, then you pay the tax in Spain. That is what I understood!. But it does not say anything about if you live in Spain and you are a UK+Spanish national (i.e. if you the two nationalities)... does anyone know where to pay the tax? Many thanks. Kind regards.

Steveyjoanna wrote on Sun Apr 30, 2023 10:23pm:

Your government pension is exempt being calculated under the dual taxation treaty,been in force before and after Brexit.Regardless of your nationality ,a British government pension is exempt Spanish taxation.

It has to be declared but is ignored in the final calculation,government pension comprises of military pensions,local government ,civil service etc.Exempt double taxation as it is taxed at source,it couldn't be clearer.
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costamar wrote on Mon May 1, 2023 11:22am:

Hi SteveyJoanna,

Thanks for your reply, but I have just had a look at the "double taxation treaty" (UK-Spain), and this is what it says, regarding "government pensions" (Article 18).  The way I understand it  is that for tax purposes, it all depends on the "nationality"  of the person  who rec...

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...eives the pension. Here is Article 18, copied below. If anyone can throw any light about it, please do so!  Many thanks to all,  because I guess no Spanish "gestor"  is going to take the trouble to research this...!

Double Taxation Treaty  (Article 18 :  GOVERNMENT SERVICE):

1.

a)   Salaries, wages and other similar remuneration paid by a Contracting State or a political subdivision or a local authority thereof to an individual in respect of services rendered to that State or subdivision or authority shall be taxable only in that State.

b) However, such salaries, wages and other similar remuneration shall be taxable only in the other Contracting State if the services are rendered in that State and the individual is a resident of that State who:

(i)     is a national of that State;  or

(ii)    did not become a resident of that State solely for the purpose of rendering the services.

2.

a)    Notwithstanding the provisions of paragraph 1,  pensions and other similar remuneration paid by, or out of funds created by, a Contracting State or a political subdivision or a local authority thereof to an individual in respect of services rendered to that State or subdivision or authority shall be taxable only in that State.  

b)   However, such pensions and other similar remuneration shall be taxable only in the other Contracting State if the individual is a resident of, and a national of, that State.

3.

The provisions of Articles 14, 15, 16 and 17 shall apply to salaries, wages, pensions, and other similar remuneration in respect of services rendered in connection with a business carried on by a Contracting State or a political subdivision or a local authority thereof