How come our UK State Pensions are entirely wiped-out by Hacienda? - Page 4

Gareth23 wrote on Thu Feb 16, 2023 7:26pm:

Thanks, but it is not "anticipated pension amounts" in my case, as I have already been receiving my pension for three years.  How I know that almost all my UK pension is being taken by the taxman in Spain is simply that it happens every year!  Hacienda takes most of the amount I get pai...

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...d by the UK state pension.  I am left with just a few hundred each month of my Spanish pension.

The fact that my friend has just discovered his entire UK pension will be taken by Hacienda (apart from one pound per month!) prompted me to ask whether this can be right.  I do not want to provide all the figures here because I am conscious that a public forum is not the place to put financial information!  

My colleague and I simply want to get this situation properly examined because we have been teaching and paying into pensions on the understanding we could retire without being in poverty, but we had not taken into account the punitive take from Hacienda when your pension comes from more than one payer.

Clearly, we need a tax professional on this but we have no idea where to go, and we shall share the cost of consultation as we are both in the same plight.

babbelj wrote on Wed Feb 22, 2023 8:25pm:

Is it possible to stop sending your pension to Spain or have your pension sent to one of your relatives or a saving account?  No shouting please I have no idea of this is legal or not.

alacant wrote on Thu Feb 16, 2023 8:28pm:

Thanks for the reply. I also declare yearly online.

The documentation concerning the number of sources of income declarable for pension purposes is explained here;

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https://www.boe.es/eli/es/res/2003/01/13/(1)

My main issue, as with @Gareth23, is the one of the reduction in allowance after which tax must be paid when the pension originates from more than one source 

I wonder if anyone has experience in dealing with this or could recommend a gestor versed in UK pensions who could clarify?

Cheers and thanks again.

Kimmy11 wrote on Sun Feb 19, 2023 7:49pm:

Hi Gareth,

I asked my tax advisor about receiving State pensions from 2 payers, and this is extracted from their response:

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"An individual can only ever receive 100% state pension from their responsible country, if they only contribute to social security in UK and EU countries. A person cannot receive any more than that, no matter how many additional years they pay in.

"So, if someone pays 25 years to UK, then 15 years to Spain, they would still only get the equivalent of 100% state pension not (for example) 25/37ths of a UK pension plus 15/37ths of a Spanish pension, i.e. they cannot receive 40/37ths of a state pension.

"(The number of years required to get 100% state pension depends on retirement age and required contributory years of the individual, therefore 37 is used only as an example.)

"The only way to get more than 100% combined state pension is if the person works beyond their retirement age in Spain and so can accrue more pension years."

This suggests to me that the idea offered by Geoffro, to claim only one State Pension, or mine to defer claiming, are worth investigating with a fiscal asesor.

Kind regards, 

Kim