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Joint tax returns or not

Posted: Sat Mar 7, 2020 8:11pm
2 replies112 views3 members subscribed
marauder

Posts: 74

13 helpful points

Joined: 15 Feb 2018

Hi to all

My wife and myself hope to be living in Campoverde before the end of the year.My pension at present is a government pension so my tax is paid in the UK  . We both receive our state pension at 66 in 2 yrs time. Her pension will be around £8000 with no other income mine will be around 7000 plus a government pension tax payable in UK. What sort of tax should we expect to pay if any on our state pensions, and would a joint tax return be better than individual returns

Kind regards

Paul

Movingon

Posted: Sat Mar 7, 2020 10:08pm

Movingon

Super helpful member

Posts: 1857

1607 helpful points

Location: Albatera

Joined: 7 Feb 2018

Posted: Sat Mar 7, 2020 10:08pm

Your tax may be in UK but you will still need to declare your pension both gross and tax paid as the figures will be used to calculate your overall tax liability in Spain, you will get credit for the tax paid so won't be double taxed but it can often mean that you will pay more tax as a whole.

At £8k and from a single source your wife will not have to do a tax return at all, I think the threshold is €13k but don't quote me.

For that reason a dual tax declaration will almost certainly not be to your advantage but you'd need to do the sums to be sure. 

One point, if your £7k government pension is your only source of regular and guaranteed income you're likely to find that you are not be able to satisfy the income requirements for a residence application. Various figures seem to be bandied about but if you think around €700-750/mth each you won't be too far off the mark with latitude sometimes given for reasonsbly substantial savings and even apparently available credit card borrowing! 

jimtaylor

Posted: Sun Mar 8, 2020 5:36am

jimtaylor

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Posts: 5612

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Location: Mudamiento

Joined: 2 Feb 2017

Posted: Sun Mar 8, 2020 5:36am

On those figures no tax will be due.

If you move here July 1st or later then you won't be fiscally resident until next year, so for this year you'd do a non-resident return based on the catastral value of the property.

For your first year of fiscal residence, you have to do a tax return even if no tax is due.

For two people on a reasonable income, it is always far more expensive to do a joint return.

Make sure your government pension is only taxable in the UK:

https://www.gov.uk/hmrc-internal-manuals/international-manual/intm343040

For the full monte on tax:

Jim's guides - your complete guide to Spain



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