New Double Taxation Agreement between Spain and UK

MarcBernard

My post was in answer to Camposol who said you would pay more tax, whereas if you are only currently getting around €6800 which is currently taxable in Spain (I gave the state pension, as this is around the amount you would get) then you would get €4080 (earned income (i.e the top amount), but if you add a CSP in the UK, then it would reduce to the minimum, but it would have no effect.

If however, you currently get the state pension and say €2000 in interest , then at the moment you would pay no tax, but under the new DTA you would pay tax on about a €1000 of your interest, because you earned income allowance has been reduced.

This, I believe is what they DTA is saying, when it says they can take your CSP into account when calculating the income tax payable in Spain.

Surely the interest does not attract Earned Income Allowance??

 No, but you have your earned income allowance to offset, then your persoanl allowance, so if there is any persoanl allowance left, which there is if you only have the state pension, then this offsets against your interest, BUT, if your earned income allowance is reduced, then you end up paying tax on some of your interest, which you don't under the present system.

As I said, I might be wrong.

I still do not follow your argument. Since the UK CSP is not taxable in Spain as such, then why would it impact  on the EIA, since the taxable Spanish income remains the same as before, beitall at potentially a higher rate? Otherwise Hacianda would indeed be taxing the CSP, which will not be allowed.

If we cannot agree, reference needs to be made to a current practitioner (which I admit I am not, at 76!) Anyone on the Eye in current practise?

 If taxation was only used to provide efficient and necessay services one might feel better disposed to pay. As it is the major part of taxation is used to pay for bureaucrats who waste huge amounts of time and even more paper producing agreements such as this. Then there's the part which is spent fighting other people's wars!

I pay tax, just like everyone else, every day. As a drinker and a driver I pay at least my fair share. The issue here is how much, if any, tax one pays on investment income or pension. The solution is simple; become a tax exile. Spend ip to 89 days each year in the UK if you feel embarrased to overstay or more if you enter from Ireland where there is no imigration control on the Northern Ireland border. Use the Cherbourg/Roscroff ferries and dates of entry into and out of Spain cannnot be traced either. Yes, technically one must apply for residence after spending three months in any EU country but have you ever heard of anyone being prosecuted for failing to register. After all the treaty clearly says any sanction for not registering cannot be punitive.

Tuck all your assetts away in tax havens and use debit cards to withdraw cash. The EU and the old European havens are no longer options, David Cameron has even written to our own British Crown Protectorates asking them nicely to get their houses in order. Belize and Singapore are still serious options and in the latter one can have Sterling, Dollar and Euro accounts wth debit cards and Dollar credit cards. It is even possble to have online contol which allows instant transfer of funds between Singapore and UK at no cost.

Posters who find these ideas morally reprehensible are entitled to their opinion - in some countries - provided that opinion is not considered reprehensible by the government of the day. They possibly wouldn't agree with my other belief that death duty is the one efficient form of taxation - set at 100%. I console myself with the thought that since all property is theft we are all on the same level.