Income Tax

Posted: Sun Feb 25, 2024 2:58pm

2 replies2 members subscribed

razors03

Posts: 81

14 helpful points

Location: Torrevieja

Joined: 27 Jun 2019

Hi,

Can anyone advise me on which country will I pay my income tax to, UK or Spain and income threshold in Spain relating to taxation.

Me and my wife have taken early retirement and our income is from Buy to lets in the UK, Bond investments and savings.

We will apply for a non lucrative visa and understand what level of income is required and private medical insurance when we live in Spain.

Its a bit of a grey area when reading about the tax, and I understand we do not have to pay twice to the UK and Spain.

My parents had 20 great years living in Spain before returning to the UK.

Would appreciate any accurate help or recommendations for an accountant near Punta Prima?

Thank you in advance.

Tim.

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Posted: Sun Feb 25, 2024 11:44pm

marcliff

Legendary helpful member

Posts: 1704

2065 helpful points

Location: Rojales

Joined: 5 Jan 2023

Posted: Sun Feb 25, 2024 11:44pm

If you are moving to Spain you will pay income tax on all your worldwide earnings, pensions and all, in Spain. You must complete a form to tell the HMRC that you are now resident in Spain and they will stop taxing your income in UK. You can only do this once you have completed your first tax return in Spain. The only one that doesn't count is a government pension which is still taxed in UK. As is interest from bank accounts etc.

As the property you are renting is in UK, the UK HMRC will want their pound of flesh and tax you on the rental income; You must also declare that income in Spain but any tax paid in UK is taken into account and reduced by that amount.

Level of income is 28,800 euro per year for the first applicant and 7.200 for the second an subsequent family members. If you have enough savings to give you that income per year then that is also taken into account.

Healthcare will depend on your age and circumstances. If you are not drawing a state pension you need private health insurance with no co-payments to cover you for at least the first year. If over retirement age and drawing a state pension you can have your healthcare transferred from UK to Spain and the UK pays for it.

There are plenty of gestors (para solicitors) who can handle you tax returns for you.

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Posted: Mon Feb 26, 2024 8:31am

razors03

Original Poster

Posts: 81

14 helpful points

Location: Torrevieja

Joined: 27 Jun 2019

Posted: Mon Feb 26, 2024 8:31am

marcliff wrote on Sun Feb 25, 2024 11:44pm:
If you are moving to Spain you will pay income tax on all your worldwide earnings, pensions and all, in Spain. You must complete a form to tell the HMRC that you are now resident in Spain and they will stop taxing your income in UK. You can only do this once you have completed your first tax retu...

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...rn in Spain. The only one that doesn't count is a government pension which is still taxed in UK. As is interest from bank accounts etc.
As the property you are renting is in UK, the UK HMRC will want their pound of flesh and tax you on the rental income; You must also declare that income in Spain but any tax paid in UK is taken into account and reduced by that amount.
Level of income is 28,800 euro per year for the first applicant and 7.200 for the second an subsequent family members. If you have enough savings to give you that income per year then that is also taken into account.
Healthcare will depend on your age and circumstances. If you are not drawing a state pension you need private health insurance with no co-payments to cover you for at least the first year. If over retirement age and drawing a state pension you can have your healthcare transferred from UK to Spain and the UK pays for it.
There are plenty of gestors (para solicitors) who can handle you tax returns for you.

Much appreciated for taking your time to respond to my question on the rental income.

We are not at the official retirement age and depend on our rental income and fixed returns on our savings bonds.

Thank you once again.