taxation

Posted: Tue Mar 9, 2021 4:43pm

9 replies239 views4 members subscribed

razors03

Posts: 81

14 helpful points

Location: Torrevieja

Joined: 27 Jun 2019

Hi

Just wonder if there is a simple explanation for straight forward tax advice.

I am aiming over the next 12 months to become a resident in Spain along with my parents that have been residents for 12 years.

My retirement pension is invested in retail shops and houses in the UK which I wish to keep.

I have the required amount of income required by the Spanish authorities but who do I pay tax to?

Uk or Spanish or both?

I am late 50s etc not at the official retirement age.

regards Tim.

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Posted: Tue Mar 9, 2021 9:02pm

Kelvin1960

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Location: Pinar De Campoverde

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Posted: Tue Mar 9, 2021 9:02pm

I am below UK retirement age (as is my wife). We receive company pensions, but we have a little bit of income from UK property and a few company shares.

We used a gestor/tax adviser to sort out our taxes.

We pay income tax on our company pensions in Spain (also on dividends, savings interest, etc., and our UK State Pensions will be taxed in Spain in due course).

We pay income tax on the property income in the UK. But we declare this income in Spain, and it is included in our overall income for the purposes of setting our tax rate.

Posted: Tue Mar 9, 2021 9:27pm

razors03

Original Poster

Posts: 81

14 helpful points

Location: Torrevieja

Joined: 27 Jun 2019

Posted: Tue Mar 9, 2021 9:27pm

Kelvin1960 wrote on Tue Mar 9, 2021 9:02pm:
I am below UK retirement age (as is my wife). We receive company pensions, but we have a little bit of income from UK property and a few company shares.
We used a gestor/tax adviser to sort out our taxes.

Read more...

We pay income tax on our company pensions in Spain (also on dividends, savings interest, etc., and our UK State Pensions will be taxed in Spain in due course).
We pay income tax on the property income in the UK. But we declare this income in Spain, and it is included in our overall income for the purposes of setting our tax rate.

That’s brilliant much appreciated.

Tim

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Posted: Thu Mar 11, 2021 2:31am

igup

Posts: 91

37 helpful points

Location: Monóvar

Joined: 24 Jun 2020

Posted: Thu Mar 11, 2021 2:31am

Kelvin1960 wrote on Tue Mar 9, 2021 9:02pm:
I am below UK retirement age (as is my wife). We receive company pensions, but we have a little bit of income from UK property and a few company shares.
We used a gestor/tax adviser to sort out our taxes.

Read more...

We pay income tax on our company pensions in Spain (also on dividends, savings interest, etc., and our UK State Pensions will be taxed in Spain in due course).
We pay income tax on the property income in the UK. But we declare this income in Spain, and it is included in our overall income for the purposes of setting our tax rate.

Hi Kelvin,

May I have details of your gestor please?

Many thanks.

Iggy

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Posted: Thu Mar 11, 2021 10:55am

Kelvin1960

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Posts: 1486

1769 helpful points

Location: Pinar De Campoverde

Joined: 5 Mar 2017

Posted: Thu Mar 11, 2021 10:55am

igup wrote on Thu Mar 11, 2021 2:31am:
Hi Kelvin,
May I have details of your gestor please?

Read more...

Many thanks.
Iggy

http://www.britannialegals.com/

A 4 minute walk from my house.

Posted: Thu Mar 11, 2021 11:46am

razors03

Original Poster

Posts: 81

14 helpful points

Location: Torrevieja

Joined: 27 Jun 2019

Posted: Thu Mar 11, 2021 11:46am

Kelvin1960 wrote on Thu Mar 11, 2021 10:55am:
http://www.britannialegals.com/
A 4 minute walk from my house.

Kelvin

Thank you for this as its not far from my parents and just emailed them for tax advice etc.

Appreciate the recommendation.

Tim

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Posted: Thu Mar 11, 2021 1:55pm

dean19

Posts: 2

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Location: Torrevieja

Joined: 19 Oct 2017

Posted: Thu Mar 11, 2021 1:55pm

Hi Tim,

There is a double taxation agreement between UK & Spain, but regarding rental income you would have to submit UK & Spanish tax returns. UK basically get first bite of the cherry but you would be able to offset some of that UK tax against your Spanish tax obligation. As a British citizen you would also be still allowed your full UK tax allowance , but I suggest you complete a NRL1 form from HMRC otherwise if your rentals are collect by agents they would be obliged to deduct tax at 20% gross then you would have the hassle of claiming most of it back.Regarding your Spanish Tax return rentals are favourably treated as long as you have commercial leases and shorthold tenancy agreements in place and you are only taxed on 40% of that rental income. It is complicated and made more so by the fact the Spanish and UK tax years do not run concurrently. Seek professional advice. Hope this helps. I've been through all this myself ! Best of luck. Dea

Posted: Thu Mar 11, 2021 4:23pm

igup

Posts: 91

37 helpful points

Location: Monóvar

Joined: 24 Jun 2020

Posted: Thu Mar 11, 2021 4:23pm

Kelvin1960 wrote on Thu Mar 11, 2021 10:55am:
http://www.britannialegals.com/
A 4 minute walk from my house.

Many thanks.

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Posted: Thu Mar 11, 2021 4:32pm

Kelvin1960

Super helpful member

Posts: 1486

1769 helpful points

Location: Pinar De Campoverde

Joined: 5 Mar 2017

Posted: Thu Mar 11, 2021 4:32pm

dean19 wrote on Thu Mar 11, 2021 1:55pm:
Hi Tim,
There is a double taxation agreement between UK & Spain, but regarding rental income you would have to submit UK & Spanish tax returns. UK basically get first bite of the cherry but you would be able to offset some of that UK tax against your Spanish tax obligation. As a British citizen y...

Read more...

...ou would also be still allowed your full UK tax allowance , but I suggest you complete a NRL1 form from HMRC otherwise if your rentals are collect by agents they would be obliged to deduct tax at 20% gross then you would have the hassle of claiming most of it back.Regarding your Spanish Tax return rentals are favourably treated as long as you have commercial leases and shorthold tenancy agreements in place and you are only taxed on 40% of that rental income. It is complicated and made more so by the fact the Spanish and UK tax years do not run concurrently. Seek professional advice. Hope this helps. I've been through all this myself ! Best of luck. Dea

Good point.

My wife and I completed Non Resident Landlord forms ... i.e. we declared that we are receiving rental income in the UK, but that we are not resident in the UK.

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Posted: Thu Mar 11, 2021 4:46pm

razors03

Original Poster

Posts: 81

14 helpful points

Location: Torrevieja

Joined: 27 Jun 2019

Posted: Thu Mar 11, 2021 4:46pm

Kelvin1960 wrote on Thu Mar 11, 2021 4:32pm:
Good point.
My wife and I completed Non Resident Landlord forms ... i.e. we declared that we are receiving rental income in the UK, but that we are not resident in the UK.

Hi Dea

Appreciate your help and I did think it would more complex, so I have now emailed a Spainish company recommended by someone on the forum.

Hopefully they can lead me in the correct direction also.

Thank you.

Tim