Income tax.

Hi guy's, my wife and I are moving to Mallorca permanently in October this year, ages 61 and 59, we will not be working and are hoping to live off of private pensions until we reach old age pension age, we hope to lift just our personal allowance of £11,000 a year til we hit 66 and 67 respectively, will we pay a Spanish tax on this money?

Any information on this subject will be gratefully appreciated.

The Harrieman.

Spanish allowances are lower than that,  You can Google details or search the forum.

you will be subject to Spanish income tax if living there permanently, on  all your worldwide income, including tax on investments, rentals, etc.

if you inherit from someone, wherever it comes  from,  relatives etc, you will pay inheritance tax  on it in Spain if over a certain level

if you win money, or get a lump sum,  pension pot or matured  insurance,etc  wherever it's from , will incur tax in Spain

Research assets declaration as well, as it could affect you if you have investments, savings over a certain amount.

Too big a subject to summarise here.

you may want to consult a financial expert before making the move.

Assets declarations are not subject to tax. 

Depends if your £11000 (€13200 at today's rate) is a government pension or not. If so it won't be liable for tax. You also get tax allowances at a basic rate of 5500 euro, a married person allowance of 3400 euro (ish) and a low income allowance of around 3000 euro if your earnings are below 14000 euro.Any tax paid in UK is offset against any Spanish tax and that is an agreement between UK and Spain, not the EU. 

We get substantially more than your your amount and don't pay any income tax in Spain even with the new rules on declaring government pensions.

Get a gestor to do your intial return. You probably won't pay tax on that to start and then, if you only have one income, you won't need to submit another one until your earnings go over 22000 euro. 

But see an advisor first.

If you win the big prize on the lottery I'm sure you won't be too disappointed paying tax on it.

I know asset declarations are not subject to income tax , But it's something the OP needs to know if she is considering moving to Spain

There are tax implications, as income / interest from investments declared on the 720 will have to be declared on the income tax return

as regards the 22 k level there is often confusion  and misunderstanding about this

It only applies to income from one source, that has already been taxed

it does not apply to those who can take advantage of the double taxation treaty, so in other words not to ex pats.

it is amazing how many think they can earn 22 k before having to declare it.

it would be very nice if that were the case!

You are very lucky not to pay income tax on an amount much more substantial than 11 k!

I think it is a little bit more complected ,than just paying you're tax in spain just in case you have not heard the UK is no longer a part of the EU ,so if l was you l would contact the Spanish embassy ,and make inquiries in to whether you can live in Spain as a none EU citizen theirs a lot of other considerations to take in as well like the EHIC card it will not be valid after 3 months so you will need to take out private health care good luck anyway.

Harrie, Sorry to have to say this but Ignore Windtalker.  UK is still in the EU and will be until two years after they have triggered Article 50 of the Lisbon Treaty.

Campos is right in all the points she makes

Bear in mind one  should declare all income in Spain and that includes, as of this year,  Crown Pensions.  Although it is correct that such a pensions cannot be taxed in Spain they are ‘taken into consideration’ when deciding the percentage of tax to be paid on other taxable income including OAP, private pensions, bank interest  etc.  In my case,  last year I paid 1,100 € tax,   this year with my Crown Pension taken in consideration I paid just under 3,000 €

Whilst the Double Taxation Agreement between Spain and UK means you cannot pay the same tax twice, if  livimg in Spain (resident) all income should be declared in Spain.  There is little point in paying tax in UK as although you will get  £11,000 tax free there, that will be cancelled out when you declare that income in Spain. Thus you will pay the same tax as you would have had you declared all that income in Spain, and will not be making two tax returns and having to produce additional paperwork..

Windtalker, why do you insist on saying UK is no longer part of the EU? Are you just extremely misinformed or making things up? The UK is still a part of the EU and will be for at least 2 years after they have announced they are going to leave which doesn't look like it will be until October. So that's about another 2 years and 4 months that the UK will still be in the EU. You have been told this on several occasions but it seems to be very difficult for it to penetrate. You're only flounce on other subjects was to say you wouldn't post anymore.

I will say again. The UK IS STILL PART OF THE EU AND WILL BE FOR AT LEAST 2 YEARS. Windtalker has also made up the bit about the EHIC as nobody knows what will happen until after the talks finish and NOTHING WILL HAPPEN UNTIL THE END OF THE 2 YEARS.

And @camposol

I didn't say I didn't pay income tax. I said I didn't pay income tax in Spain. My income is a government pension which is taxed in UK. Next year, when I get the state pension, I'm pretty sure I will pay tax on it.

I didn't say I didn't pay income tax. I said I didn't pay income tax in Spain. My income is a government pension which is taxed in UK. Next year, when I get the state pension, I'm pretty sure I will pay tax on it.

I think you are right, providing you have absolutely no other income worldwide, but even the smallest  income,  say on a bank or building society account,  probably would mean a tax declaration in Spain is obligatory.

PS  If that applies to anyone,  30^th June is the last day to make the declaration.

I think you're misreading me johnzx. I do make a tax return in Spain every year through my solicitor. It's just that, up to now, there has been no tax to pay. Next year, though...........

Hi guy's,

Thanks for all your advice and I will take everything on board.

F.I.O. I managed to speak to someone at HMRC today who was very helpful, ' however ' she was unable to answer my question about paying tax on a private pension if I only lift £11,000 in April at the start of a new tax year, another tax consultant has the information and will call me back within 5 working day's, when I hear from him I will let you all know what he say's.

The Harrieman.

Please don't listen to Maridave or John zx they are both giving you misleading information ,first of all you said you and you're partner are moving to Spain permanent and you are under pensionable age ,so the EHIC card will not be available for you to use as you will no longer be a British citizens the EHIC is only available for British citizens ,as you have left the UK permanent you are now Spanish citizens as a full time Spanish residents you will not get a EHIC card ,  if you did live in the UK it is only valid for 3 months out of the country and is only for EU countries ,you will need private health care policy believe me.

The UK no longer has any powers in the EU zone's ,although it still has to pay in £350 million per week for up to two years after Article 50 gets triggered ,the UK cannot and will not take part in any EU policy making that is in Article 50 I am totally disgusted with the misinformation that has been given to you ,you can check these facts on the appropriate Dot GOV site's on the net .

This message was last edited by windtalker on 29/06/2016.

Windtalker.    Sorry to say again,  but you are talking nonsense

Registering as a EU Citizen in Spain (green paper/card)  or taking Residencia  as a non EU citizen must do, does not confer Spanish nationality. I wish it did, my wife is Filipino.

You are of course correct that they (harrieman) will not be able to use the EHIC.

When a person moves to Spain,   as opposed to visiting,  the 3 month and 183 days rules do not apply.  They are resident immediately. 

When one applies for EU Citizen Registration they must prove they have FULL medical cover.  In Harrieman's case that can only be by private insurance cover.  One must also prove they have sufficient to live on.

I think it was you that mentioned the EHIC, windtalker, no-one else. I just pointed out nobody knows what will happen and that we are, indeed, still in the EU. When you keep harking on about this mythical 350 million a week the UK pays in then it just confirms you have lost it. Even Gove and Johnson admit it was a lie and Farage has done the same.

Please tell me what misinformation was given? 

Mariedav the UK paid £8.5 billion net after discounts  that is a lot money in anyone's book I couldn't tell you how many millions per week that ads up to  but according to dot gov sites the initial pament is approximately 18 billion the UK got 4.5 billion back in grants ,and a 5 billion discount. These are official dot gov statements, something that the INS camp did not want the public to know they just told us lies about the whole thing ,WW3 /ARMAGEDDON /STERLING WILL BE WORTHLESS /THE STOCK MARKET WILL COLLAPSE ,NOW JUST LOOK STERLING IS UP ,THE STOCK MARKET IS UP AND NONE EU countries ARE QUEUING UP TO DO BUSINESS WITH Great Britain .

I thought the question was about paying taxes on 11 grand a year, not how will the UK leaving affect me. However, if you want to go off on one of your sidetracking rants please go ahead (*8,5 billion is about 163 million a week, by the way).

And the point remains. UK is still in the EU for at least 2 years after article 50 is applied, not now. The medical insurance bit which you threw in from somewhere has always been the case and has nothing to do with staying in the EU or not. The same with no negotiations in the EU goes for anything to do with the withdrawal process. I'm afraid your nice Mr Farage will still be drawing his money as an MEP for a couple of years and not turning up for debates just like always. 

I notice in the paper today that government departments are busy answering irate callers that they haven't updated their web pages as UK has left the EU. It is patiently explained to them that, no, UK has not yet left the EU and it is business as usual until all negotiations are completed. 

Certain Spanish regions are encouraging British people to apply for empadronamiento and residency now to formalise their positions for when it does happen. 

Guessing at what is going to happen does no good at all.

Maridav it looks like I have gone off the thread ,but if you read the original post that started all this they clearly did not factor in private health  care,l really don't want to scupper any ones dreams ,but you have to get real £11,000 take away private health care of approximately £200 per month for two ,(that's what l pay) so they won't have great amount left to live on so I think paying tax will be the least of their worries..sorry to be blunt .

Just to add to the debate, I am resident in Spain, I have a small private pension plus a UK state pension, adding up to approx? 11,000 UK pounds, Plus savings with not much interest to take into account.

I have just entered my tax return and have a tax bill of 1,350 Euros to pay.  If i was still in the UK i wouldn't have any tax to pay.

It was a bit of a surprise as last year i didn't pay anything.

Having said that i am happy to contribute as i have Spanish health care which is second to none, and far superior to the UKs NHS.

And of course we have the "lifestyle" and sunshine which we would not be enjoying if we had stayed in the UK.

Just to confuse and iritate me a bit more, my wife has a Crown pension (taxed in the UK - well actually no tax to pay as it is below the UK tax threshold) plus a UK state pension, taxed in Spain - the crown pension is declared in Spain but not taxed. - her tax bill (in Spain) is zero - and she earns 2,500 UK pounds more than me on an annual basis.

We were "computed" together for tax purposes by our Gestoria.

We were "computed" together for tax purposes by our Gestoria.

I'm no tax expert but I reckon thats why you are paying so much, our gestoria runs both of ours (wife and I) through the Padre system to find out if its better to declare individually or joint - It always comes back a lot more to pay if we declare together.

It always comes back a lot more to pay if we declare together.

In our case, in the past 10 years,  only once has it been beneficial to declare separately,  but then my wife does not have an income other than our shared building society accounts.  But always worth checking

CostaBlade, any decent accountant or gestor would tell you whether it is more beneficial to declare jointly or singly

it depends on the income level of each person

it shouldn't be automatic 

I would find yourself another accountant!