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State pension

Posted: Mon Oct 11, 2021 5:55pm
24 replies995 views9 members subscribed
Smoggie

Posts: 18

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Location: Rojales

Joined: 14 Jun 2020

Can anyone tell me if they get taxed on their state pension,I've heard they do, and also, would the pension taken when you're 55,be taxed also, I don't no at all,,thanks in advance

elinspain

Posted: Mon Oct 11, 2021 5:59pm

elinspain

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Location: La Mata

Joined: 4 May 2018

Posted: Mon Oct 11, 2021 5:59pm

Hello Smoggie

 I presume you're talking about a UK state pension? I am not taxed on my state pension & it is paid directly into my Spanish bank account every month & has been for 15 years

Cheers

Elinspain

Herefordjack

Posted: Mon Oct 11, 2021 6:20pm

Herefordjack

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Posts: 401

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Location: Pego

Joined: 18 Dec 2017

Posted: Mon Oct 11, 2021 6:20pm

If you are resident in Spain, your UK state pension is considered part of your annual worldwide income. You are supposed to make an income tax return every year in which you declare all of your annual income.

Then, after deducting personal allowances, if your income is still large enough, you will be taxed on it.

So the answer to your question is, it depends on how big your overall income is. But the idea that your UK state pension is somehow exempt is totally fallacious.

Elinspain, I presume you do an annual income tax return?

Under the double tax agreement, however, if you pay tax on your income in the UK, the Spanish tax authorities will take this into account when assessing your tax bill in Spain.

tebo53

Posted: Mon Oct 11, 2021 6:22pm

tebo53

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Location: Benidorm

Joined: 29 May 2018

Posted: Mon Oct 11, 2021 6:22pm

Smoggie wrote on Mon Oct 11, 2021 5:55pm:

Can anyone tell me if they get taxed on their state pension,I've heard they do, and also, would the pension taken when you're 55,be taxed also, I don't no at all,,thanks in advance

My UK state pension is not taxed. I get mine every 4 weeks paid into my UK bank account. 

Steve 

elinspain

Posted: Mon Oct 11, 2021 6:28pm

elinspain

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Location: La Mata

Joined: 4 May 2018

Posted: Mon Oct 11, 2021 6:28pm

Herefordjack wrote on Mon Oct 11, 2021 6:20pm:

If you are resident in Spain, your UK state pension is considered part of your annual worldwide income. You are supposed to make an income tax return every year in which you declare all of your annual income.

Then, after deducting personal allowances, if your income is still large enough, you will be taxed on it....

...

So the answer to your question is, it depends on how big your overall income is. But the idea that your UK state pension is somehow exempt is totally fallacious.

Elinspain, I presume you do an annual income tax return?

Under the double tax agreement, however, if you pay tax on your income in the UK, the Spanish tax authorities will take this into account when assessing your tax bill in Spain.

Hello Herefordjack

 Yes I certainly do, a company in Torrevieja take care of my tax declarations for me annually

Cheers

Elinspain

tebo53

Posted: Mon Oct 11, 2021 6:37pm

tebo53

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2096 helpful points

Location: Benidorm

Joined: 29 May 2018

Posted: Mon Oct 11, 2021 6:37pm

Herefordjack wrote on Mon Oct 11, 2021 6:20pm:

If you are resident in Spain, your UK state pension is considered part of your annual worldwide income. You are supposed to make an income tax return every year in which you declare all of your annual income.

Then, after deducting personal allowances, if your income is still large enough, you will be taxed on it....

...

So the answer to your question is, it depends on how big your overall income is. But the idea that your UK state pension is somehow exempt is totally fallacious.

Elinspain, I presume you do an annual income tax return?

Under the double tax agreement, however, if you pay tax on your income in the UK, the Spanish tax authorities will take this into account when assessing your tax bill in Spain.

I think, but may be wrong, that UK state pension is taxed at source and exempt from taxation in Spain. 

Steve 

Binz1

Posted: Mon Oct 11, 2021 7:24pm

Posts: 17

11 helpful points

Joined: 12 Mar 2021

Posted: Mon Oct 11, 2021 7:24pm

tebo53 wrote on Mon Oct 11, 2021 6:37pm:

I think, but may be wrong, that UK state pension is taxed at source and exempt from taxation in Spain. 

Steve 

This is correct all UK pension is taxed at source if it is above the threshold outlined by hmrc. 

ATB Binz

Herefordjack

Posted: Mon Oct 11, 2021 8:18pm

Herefordjack

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Posts: 401

422 helpful points

Location: Pego

Joined: 18 Dec 2017

Posted: Mon Oct 11, 2021 8:18pm

Binz1 wrote on Mon Oct 11, 2021 7:24pm:

This is correct all UK pension is taxed at source if it is above the threshold outlined by hmrc. 

ATB Binz

This is what I was mentioning in my reply when I mentioned the double tax agreement.

However, some of us, myself included, have taken up the option of disengaging entirely from the UK tax system and have our income taxed entirely in Spain. This may or may not cost me a little more, but I am more comfortable with my tax going to the country in which I live and in which I enjoy the benefits of state expenditure.

Annier999

Posted: Tue Oct 12, 2021 9:51am

Annier999

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Posts: 191

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Posted: Tue Oct 12, 2021 9:51am

Binz1 wrote on Mon Oct 11, 2021 7:24pm:

This is correct all UK pension is taxed at source if it is above the threshold outlined by hmrc. 

ATB Binz

I don't believe the state pension is taxed at source. This only applies to "Government" pensions, usually local government, NHS, police and military pensions. There's a full list on Gov.UK. The state pension is not on the list, and should be declared in Spain. Whether you pay tax on it will depend on your total income and allowances as determined by the Spanish tax authorities. 

Stevec2x

Posted: Tue Oct 12, 2021 11:09am

Stevec2x

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Posts: 484

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Location: Playa Flamenca

Joined: 23 Jan 2020

Posted: Tue Oct 12, 2021 11:09am

Hi Smoggie

I don't have all the answers, it's a confusing subject at times, but here's my own situation...

I started taking my personal pension when I was 55. I chose to take an amount per month which is just below the threshold for paying tax in either country. If I was to take more than that, then tax would be payable when I do my Spanish tax return. Iirc, the UK Inland Revenue would not tax it because I am no longer tax-resident in the UK, but I'm not sure if there may be a few bits of paperwork involved first!

Cheers

Steve

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