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Tax

Posted: Fri Jun 24, 2022 5:25pm
6 replies176 views3 members subscribed
Paul56

Posts: 46

3 helpful points

Location: Torrevieja

Joined: 6 May 2019

Hi,

This year I enter the Spanish tax  system for the first time...not too scary a number.

The outcome for next year when my state pension kicks in and I file as a single pensioner with two pensions, the result is a lot more concerning!

Does anyone have the knowledge of how the % of tax paid changes as net pension £ grows and any other significance of declaring 2 not 1 pensions?

My next step will be to search for any factors that will mitigate the tax increase.

IE Finding a tax expert with proven credentials and comes recommended?

Thanks for your time

Herefordjack

Posted: Fri Jun 24, 2022 5:30pm

Herefordjack

Super helpful member

Posts: 875

1090 helpful points

Location: Pego

Joined: 18 Dec 2017

Posted: Fri Jun 24, 2022 5:30pm

You can work it out yourself if you know your way around an Excel spreadsheet.

You can also do your own tax return online next year and save the cost of a so called expert consultant.

Paul56

Posted: Fri Jun 24, 2022 5:55pm

Paul56

Original Poster

Posts: 46

3 helpful points

Location: Torrevieja

Joined: 6 May 2019

Posted: Fri Jun 24, 2022 5:55pm

Herefordjack wrote on Fri Jun 24, 2022 5:30pm:

You can work it out yourself if you know your way around an Excel spreadsheet.

You can also do your own tax return online next year and save the cost of a so called expert consultant.

Not an expert but fairly Excel savvy.

The knowledge I've gained so far is that the current trigger point as to whether or not you are required to complete a tax return is set at e14k, rising to e22k for 22/23.

A solicitor is assisting and quoted my tax burden for this year, but seems reluctant to explain how the burden was derived?

Total UK pension x exchange rate =x£

Is this then multiplied by x % depending on x£ bands and once allowance is accounted for.

Do you know and understand that process, and the x% and x£ ?

Herefordjack

Posted: Fri Jun 24, 2022 6:03pm

Herefordjack

Super helpful member

Posts: 875

1090 helpful points

Location: Pego

Joined: 18 Dec 2017

Posted: Fri Jun 24, 2022 6:03pm

Paul56 wrote on Fri Jun 24, 2022 5:55pm:

Not an expert but fairly Excel savvy.

The knowledge I've gained so far is that the current trigger point as to whether or not you are required to complete a tax return is set at e14k, rising to e22k for 22/23.

A solicitor is assisting and quoted my tax burden for this year, but seems reluctant to explain how the burden was derived?

Total UK pension x exchange rate =x£

Is this then multiplied by x % depending on x£ bands and once allowance is accounted for.

Do you know and understand that process, and the x% and x£ ?

It's not quite as simple as your example. My guide will allow you to construct your own spreadsheet. 

Every resident of Spain needs to file an income tax return, regardless of income and regardless of whether or not you end up having to pay tax. It's the law.

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tebo53

Posted: Fri Jun 24, 2022 6:08pm

tebo53

Legendary helpful member

Posts: 4779

4961 helpful points

Location: Benidorm

Joined: 29 May 2018

Posted: Fri Jun 24, 2022 6:08pm

Paul56 wrote on Fri Jun 24, 2022 5:25pm:

Hi,

This year I enter the Spanish tax  system for the first time...not too scary a number.

The outcome for next year when my state pension kicks in and I file as a single pensioner with two pensions, the result is a lot more concerning!

Does anyone have the knowledge of how the % of tax paid changes as net pension £ grows and any other significance of declaring 2 not 1 pensions?

My next step will be to search for any factors that will mitigate the tax increase.

IE Finding a tax expert with proven credentials and comes recommended?

Thanks for your time

I had three pensions when I retired and came to live permanently in Spain. I didn't pay any tax whatsoever for the first 3 years. An accountant does all my accounts for €80.

Have you filled in the Modelo 720 ?

Steve 

Darro

Posted: Fri Jun 24, 2022 6:32pm

Darro

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Posts: 1454

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Location: Catral

Joined: 8 Sep 2021

Posted: Fri Jun 24, 2022 6:32pm

"the current trigger point as to whether or not you are required to complete a tax return is set at e14k, rising to e22k for 22/23"


First I've heard of that, do you have a link to verify it?

I'm not sure HerefordJack is correct, or at least not in the sense that those on low incomes are obliged to submit a return each year, but that said doing so should ensure that those benefitting from an S1 will continue to get their medicines FOC.

You mention a guide but what are you referring to?

Herefordjack

Posted: Fri Jun 24, 2022 6:44pm

Herefordjack

Super helpful member

Posts: 875

1090 helpful points

Location: Pego

Joined: 18 Dec 2017

Posted: Fri Jun 24, 2022 6:44pm

Darro wrote on Fri Jun 24, 2022 6:32pm:

"the current trigger point as to whether or not you are required to complete a tax return is set at e14k, rising to e22k for 22/23"


First I've heard of that, do you have a link to verify it?

I'm not sure HerefordJack is correct, or at least not in the sense that those on low incomes are obliged to submit a return each year, but that said doing so should ensure that those benefitting from an S1 will continue to get their medicines FOC....

...

You mention a guide but what are you referring to?

Let me clarify my earlier post. This is taken from a professional guide which I believe to be correct:

"Everyone has to file a Spanish tax return in the first year of tax residency. After the first year, you don’t have to file a Spanish tax return if your income from all sources is less than €8,000 and you have less than €1,600 of bank interest or investment income."

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