Medication - Page 2

Thanks for that Peter. You are very helpful. Why and what taxes are paid for assets.  Ie property? 

Thanks. 

I am not a tax adviser, but my wife and I have our tax process going on right now.

We have Spanish Residency

We have a house in Spain (our primary residence) and property in the UK.

This is my understanding of what is taxed in UK/Spain

Income

UK

Pension income - specific types of "government" pensions, e.g. Civil Service/Armed Forces. I am unclear if Local Authority/teacher/NHS pensions are included

Income from UK property - rental, capital gains

Spain

Pension income - UK State Pension, pension from private sources, e.g. company pensions, annuities, etc. (Again, not sure about Local Authority/NHS)

Interest on savings.

Dividend income.

Any other investment scheme income.

Assets

You are required to declare your worldwide assets outside of Spain (and their values at acquisition)

Property 

Company Shares

Investment schemes

Annuities (self-invested, not company pension schemes)

If your worldwide assets exceed a certain value (I think around 700K Euros), Spain applies a wealth tax.

Overall, if you are in receipt of more than a UK State Pension, you will probably pay more tax in Spain than in the UK. The non-taxable allowance in Spain are around half of the UK, so more of your income is taxed.

Will60 is mostly correct...personal allowance in Spain is around 6000€ 

Local Government pensions including teachers pension and some NHS pensions are taxed at source by HMRC but will be added to your overall income in Spain  and may then take you into a higher tax bracket

State pension and any interest on savings in UK or Spain are taxed in Spain

Worldwide assets including property, shares, bank accounts etc must be declared if more than 50,000€ each  and wealth tax paid if more than 700,000€

There is no double taxation and you can claim back from HMRC if you think you have paid twice especially in the first year.

Overall you will possibly pay more tax in Spain but offset this against cost of IBI, petrol, etc and quality of life......and I still know where I’d rather be !

Info here...

https://www.spainaccountants.com/tax-rates

crissywissy said "Local Government pensions including teachers pension and some NHS pensions are taxed at source by HMRC but will be added to your overall income in Spain  and may then take you into a higher tax bracket"

This will only happen if you use an incompetent gestor/asseseria/abagado (in my experience the vast majority!) who does not know that a Government (as opposed to State, or Old Age) pension must be declared as income but in a differerent category known as exant or exempt. The tax folk jumped on us last year and we had to go to the Agencia Tributaria on pain of heavy fines to prove that my OH's pension from Customs and Excise (now HMRC) qualified for this. We were found to have done things correctly and everyone was happy.

One local gestor that I went to when we arrived in Murcia from Andalucia wanted to declare it in the same way as other pensions, which would have meant a tax bill of over €2000 rather than the €34 we paid for a correct return, another insisted that we did not need to declare it, refusing to accept that the law changed in 2015, which could have caused us to be fined for non-declaration.

Trust no one, do your homework and do your own tax return.

Thanks for that. Really helpful. 👍😁

Thanks again Peter. You are so helpful. 👍😁

just to clarify...although not sure why I feel the need....even if some pensions are declared exempt from Spanish tax they are still added to your overall income...nothing to do with the competency of the gestor or asesora...see below...

Government service pensions paid to retired members of the fire service, police, civil servants, armed forces and local authorities are exempt from Spanish tax. Under the new treaty the amount of the pension is still exempt but must be included when calculating how much tax is due in Spain. This could have the effect of pushing any other income – perhaps from investments and rent – into a higher tax bracket meaning you’d have to pay more tax in Spain.

they are NOT added to your overall income if the government pension is put in the correct box on the return. It is shrouded in complication exactly what they do with the figure in that box, but it produces a vastly different tax liability than if you simply add it to your other pensions: for example a state pension of say €8500 and a govt one of say €9000 declared as one total of €17500 would incur hefty tax - €8500 in the income box and €9000 in the exempt box would be much much less.

It is not the amount, it is how it is declared. Until 2015 it was accepted that govt. pensions should not be declared - the Spanish are not taxed on theirs so it seemed fair - but then the penny dropped that some Brits were better off than a similar Spaniard so the greedy taxman changed the rules.

Exempt must have a different meaning in Spanish. Anyone with a UK government pension could look at their Spanish tax return - if there is no entry in Box 525 it has been done incorrectly.

Thanks for that. I am only 60 and dont get any pensions at all. Just income from rentals. 

Hi Angie, you can buy Amlodopine (high blood pressure) over the counter in Spain.