| The Comments |
Yes, I like to buy my wine in 8 litre containers, Juan!
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I drink mine from 8 litre containers- saves on the washing-up. Just thought I would add a little intelligent comment to all this garbage on here ( not you, Don!)
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Don. Get someone to send you over a pair from the UK - my husband gets all his glasses in Poundland (don't be like my late mother-in-law and ask how much they cost).
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My account of moving to Spain. http://www.eyeonspain.com/blogs/olives.aspx"><img
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Eggcup. Erm ,methinks that would only be reading glasses .
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Actually eggcup, I have a pair of 'poundland' type glases in every room in the house and on the solarium and in the garden. I wouldn't dream of buying a pair of glasses for more than 3€!
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Hi All
For once we are not intervening because the forum rules have been infringed! :) Wow that's progress :)
But kindly requesting that you get back on thread as this is a very important thread for many people on EOS and it would be a shame to fill up the thread with light-hearted chit chat eventhough it may be fun! But it will inevitably kill the thread without realising it and many members have expressed a great interest in this topic so please attempt to keep the thread on track :)
New Double Taxation Agreement between Spain and UK
Thank you
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What would happen in the case of a military pension taxable in UK but under the tax threshold? If it is declared in Spain and added to other pension amounts it IS being taxed in Spain. Also if tax is being paid on it in UK, how will they treat it in Spain?
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Camposol,
Bit difficult to answer your question as no new law ia actually in operation yet.
When it is becomes law we will all know what the provisions are.
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According to someone called Capn Billy, on expat forum, the UK allowance will remain. When you declare your government pension in Spain, it will be used to work out your earned income and your marginal rate of tax.
This message was last edited by camposol on 08/04/2013.
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Capn Billy
Well that's relief, if HE says it, it must be true !!!!!!
'Billy, who the h... is Billl'
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My reading of the full text suggests that any pension paid as a result of Government service will be taxable in the paying state unless the recipient is a national of the receiving state. Thus there is no change. There was an occasion once when I was found to be wrong but we won't go into that!
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Fraid this is the second occasion then, as when you say "thus there is no change" , you appear to have forgotten to turn the page and read Article 22.
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Ah! It looks as if I have been shortchanged by Adobe, as my copy only went to the end of page 17. With a full copy now, I see what you mean. It looks as if someone (no doubt Hacienda) has insisted that UK adopt the Netherlands approach, which has always been the case for them. This effectively strips us of the double allowances we have so far enjoyed. I will be looking closely at the original DT agreement currently in force when I can find it, and hope to post further.
Later: I have to agree that those who currently benefit from Hacianda ignoring totally the income derived from Civil Service and similar pensions are likely to lose a substantial amount of money, depending of course on the amount of their CS pensions. There is one saving grace, however: the wording is "may ... take into account the exempted income", so perhaps Hacienda will choose to ignore the new rule. Some chance!!! I have a suspicion that the original DT agreement did not intend to give double allowances, so maybe we should realise we have benefitted for quite a long time from a mistake. This message was last edited by marcbernard on 09/04/2013.
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I don't see that the new DTA strips away the double allownance, as I don't see that the new DTA means you will be taxed on a government pension in Spain, as its still exempted. It talks about taking into account the exempted income when calculating the tax on the remaining income. I interpret this pas otentially reducing the earned income allowance, and possibly increasing the marginal rate of tax. Having said that, the impact will depend upon income taxable in Spain. I don't see that anyone on a government pension of less than €17,000 and the basic state pension will be affected, but if you have additional income, such as another pension and/or interest, this may result in additional tax. Of course, this is only my view, and I may be wrong.
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After a good night's sleep (previously escaping me for a couple of days) the mist has cleared!
Here is an example of the change brought about by the new DT agreement (yet to be dated for implementation):
Joe Taxpayer has world income of €40000 including a "Civil Service" pension of €16000. All classed as "earned".
Spanish tax base therefore €24000 less Spanish tax allowances of (say) €10000 leaving €14000 chargeable.
First tranch at 24.75% is 17007, less CSP above of €16000 leaves only €1007 equals €249.23
Second tranch at 30% on €12993 equals €3897.90
Total tax due in Spain €4147.13.
Under the old rules, the total tax in Spain would be €3459.40 (14000*24.71%). Increase in duty thus €687.73.
? agreed?
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Agreed, that's how I worked it out.
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SO, at the end of the day you ARE paying more tax in Spain as a result of declaring the government pension, so in a way you are being taxed on it. The only good thing is, when they get round to paying back overpayment of prescriptions, at least the full income will be taken into account, not a tiny one in Spain, while a huge government pension is hidden in UK, resulting in a wealthy person paying less towards his prescriptions than someone declaring all his pensions.
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It depends on the amount of income, and the amount of government pension. As I posted earlier if you're pension is around €17,000 and your only other income is the state pension, then although you will lose some earned income allowance, you won't pay any more tax because your taxable income in Spain is still within your reduced earned income allowance, and is not into the second tax band. It's only when you have additional income including interest that you will start to pay additional tax.
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I don't see why the earned income allowance would be reduced. The example I used would have had the minimum Earned Income allowance anyway, but as the CSP is exempt other than to calculate the rate of tax payable on world income, then for those within the effective range of the higher EIA, surely it cannot be utilised to reduce the Spanish EIA which is a relief from Spanish tax against taxable "Spanish" income.
I do not agree with those misguided folk who claim that a Civil Service pension is "huge". We are none of us on the sort of retirement income which certain bankers enjoy! Nor is it "hidden" Until now it is perfectly legal to leave it off the tax return.
This message was last edited by marcbernard on 10/04/2013.
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Camposol.
The fair way to tax us, who have Government employee pensions, which have been taxed at source, is to add the pension to the taxable income in Spain, work out the tax we would pay here, then deduct what we have paid in UK. That would mean we would get just one amount of tax relief, rather than the present two lots.
That would bring us into line with those who get private pensions.
Having said that, I am of course hoping that the present (unfair )system prevails,
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