What is taxed for a married couple in Spain

Hello Irish ;-)

There will be a lot of 'it depends if...' and others may correct my findings or add to them.

First 'it depends' is probably whether NI or South

Assuming you are still in the EU, so only your income in-country would be of interest but you may have paid tax when you took the pension...and Spain recognises that. The UK has an S1 form which helps. Apparently the currency transfer rate (at least from the UK DWP) to any Spanish bank is quite good, but you may wish to transfer into a UK bank account and draw from that as wished through a transfer company. The interest rates or savings accounts here are not great so we are not doing big sum t/fers.

Spain is usually interested in your total worldly assets, but just as a record, not to tax you on them. A pension is a financial asset. If it is your first year (talk to an Abagado / lawyer) may mean that you will only pay non-residence tax, if after that, it changes.

We pay a form of tax through SUMA for property here, IVA / cars, rubbish collection but those are outside of these parameters. What we don't see is any tax relief on much just because we are retired. E.g. we pay for meds until we move onto full SIPS...and then I think there is a nominal sum.

If any of this helps, hit a like and I will see it.

There are professional advisors and in this case, probably worth engaging.

Best wishes, let us know how it goes.

D & J

In Spain you can opt to be taxed individually or as a couple but which might work to your advantage depends on the makeup of your €33k total.

You need to run the numbers through a simulator which an advisor can do very quickly.

As a VERY ROUGH estimate though,  assuming your wife's only income is a standard UK pension of something under €10k on which she wouldn't pay tax as it's below the threshold, on an income on your part of €23,000 and taxed alone you might be looking at a tax bill in the region of €2k.

Hi Irish,

The Spanish tax system is much more complex than the UK´s (and probably Ireland´s), so I very much doubt that anyone on this forum could, or should, offer definitive advice on this.  To give you an outline, when you initially become tax resident in Spain, you have to declare all your worldwide assets here (Modelo 720) and then you will have to pay tax annually (Modelo 100) on any income derived from those assets.  The base rate for personal allowances in Spain is €5,550; however, there´s a range of additional allowances, some of which are age-related, and from which you may also benefit.  Each year, my tax advisor calculates whether it is more beneficial for my husband and I to submit individual tax returns, or a joint return, but I understand that the Spanish tax office plans to discontinue the joint return.

Spain and Ireland have a Dual Tax Agreement in place, so you will only pay tax on the same income in one country, but this may vary depending on the terms of that DTA.  For example, under the terms of the DTA between Spain and the UK, the State pension and personal pensions are taxed in Spain, but "Crown Pensions", i.e. military, some teachers´ and NHS pensions, have to be taxed at source in the UK, and are then declared as ´tax exempt´ in Spain.  

It´s important that you seek independent professional advice from a financial advisor who understands both Ireland´s and Spain´s tax systems, as well as the provisions of the DTA between the two countries.

Kind regards,

Kim