Pension - Page 2

Just be careful with the 25% tax free amount. There is no 25% tax free amount in Spain it’s all taxable unlike the uk, so ensure you take it before the fiscal year of residencia. ie. If you take the 25% in 2021 make sure your residencia application IS NOT in that same year (must be 2022 or after) or you’ll be liable for tax. Spanish tax year runs 1st Jan to 31st Dec, which makes far more sense!

Residencia also means you become a fiscal resident (as does stay duration), so must pay Spanish tax.

Many thanks, an excellent point, what is the tax now at, say if I draw down 12k pa in the UK and transfer into a Spanish account in euros? 

Thanks again mick

Hi Mick,

The tax free allowances are far less in Spain. In the uk it’s something like c11k, but it’s only around 8k here. It is also far more complicated as there are allowances for many things. I believe age, etc. Then the tax rates are also slightly higher, so not as beneficial as the uk.

But it’s a great life, so worth it, just get a good accountant. When we first came I had heard of the 25% not being taxable, but the person i spoke to, who professed to be an Spanish accountant, said it wasn’t an issue and timing didn’t matter. If I’d have listened to her she would of cost me thousands.

Some really useful info in this thread NickB - thanks