PeterC wrote on Mon May 25, 2020 6:47pm:
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 exam...
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...ple 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 the info Peter.