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
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
Posted: Mon Oct 11, 2021 6:20pm
Super helpful member
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.
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
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....
Read more...
...
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
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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....
Read more...
...
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
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
Posted: Mon Oct 11, 2021 8:18pm
Super helpful member
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.
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.
Posted: Tue Oct 12, 2021 11:09am
Super helpful member
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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