Hacienda Tax return income level

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Jool
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Hacienda Tax return income level

Postby Jool » Thu Nov 25, 2010 7:07 pm

If you are a resident in Spain, and receive an income (occupational pension) of less than 10000 euros per year do you still need to make a tax declaration here at Hacienda? The pension is a government teaching pension so taxed at source in the UK - does that mean a tax declaration should be made in the UK?

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Mowser
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Re: Hacienda Tax return income level

Postby Mowser » Thu Nov 25, 2010 8:14 pm

Jool
Our government pension is taxed at source in the UK, so there is no need for a UK declaration.
Make a Spanish declaration if you haven't already done so, but you teacher's pension will be discounted.
Once you pay your NIL Spanish tax, you can claim back any interest you earn in savings in the UK under the dual tax agreement. It doesn't matter that you pay no Spanish tax. What is important is that you make a declaration and are on the system.
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Re: Hacienda Tax return income level

Postby Jool » Thu Nov 25, 2010 8:46 pm

Thanks Mowser, its not actually for me but a friend who was told by a solicitor he did not need to make a return here and you have just confirmed my understanding of the situation, can he claim back the tax paid on the teacher´s pension?

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Re: Hacienda Tax return income level

Postby El Cid » Fri Nov 26, 2010 8:54 am

Jool wrote:Thanks Mowser, its not actually for me but a friend who was told by a solicitor he did not need to make a return here and you have just confirmed my understanding of the situation, can he claim back the tax paid on the teacher´s pension?


If you mean can he claim back the UK tax paid on his declaration in Spain, the answer is definitely no.

He could only do that if he had paid Spanish tax on it which of course he would not have done as the UK government pension does not have to be declared in Spain.

Your comment that the threshold for tax declaration is €10000 is not entirely true - there are other form of income, such as savings income, which may cause the threshold to drop to a much lower figure.

I have found that the most comprehensive (and accurate) guide to this question can be found on this site

http://www.advoco.es/home/22-latest/39- ... eturn.html

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Re: Hacienda Tax return income level

Postby Mowser » Fri Nov 26, 2010 9:55 am

Jool

No tax can be claimed back on the teacher's pension. A proportion of tax paid on savings can be claimed back.
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Re: Hacienda Tax return income level

Postby Jool » Fri Nov 26, 2010 11:27 am

Thank you both very much I have passed this info on

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peteroldracer
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Re: Hacienda Tax return income level

Postby peteroldracer » Fri Nov 26, 2010 12:46 pm

AIUI one must make a tax return as a resident in Spain to become recognised as "tax resident", even if it is a nil return? At some point this person surely will start to receive UK state pension, which he can get tax-free from the UK, but which must be declared here - correct?
I have come to realise that if one doesn't do the returns, the allowances when selling a home here or inheriting one's late partner's half of a property when a pensioner, and tax resident for over five years are different - or have I got it wrong?
This is something we must get sorted as I have just started to get my UK state pittance, but as I blank out when faced with tax stuff, will need a good bilingual gestor!
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Re: Hacienda Tax return income level

Postby El Cid » Fri Nov 26, 2010 3:08 pm

That's right Peter.

The best way of getting registered for tax and all the benefits that brings with regard to allowances and exemption, is to make a tax declaration, even if it is a zero return.

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DavidSearl
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Re: Hacienda Tax return income level

Postby DavidSearl » Tue Dec 07, 2010 11:53 am

FROM DAVID SEARL

FOR JOOL AND OTHER POSTERS


A civil servant or other government service pension, such as military and including municipal job pensions, is taxable only in the country of origin.

A Malaga Hacienda official told me: "For us, these UK pensions simply do not exist."

So you need not declare it.

All other posters, especially Peter Oldracer, point out and it is true, that if you do not make a declaration, you will not be considered a Tax Resident in Spain, and thus not obtain all the exemptions and benefits he mentions.

You can make a nil declaration, which serves.

Remember that, if you have a bank account in Spain, the bank pays you some miserable little interest. This is income arising in Spain. Declare it. If you have a "resident" bank account, the bank will withhold interest payments and pay them to Hacienda on your account. If you have a "non-resident" bank account, they will not withhold the interest, on the supposition that you are declaring it and paying income tax on it in some other jurisdiction.

If you were paid in 2010 €30 in interest, the bank withholds 19 per cent of that, let's say, €6, as tax on investment income. You file a return and claim a refund of this €6 as you owe no tax.

Now you are a law-abiding citizen, not a tax dodger, and you are a full Tax Resident.

Peter, I urge you to find a good "asesor fiscal" in place of the gestoria. This only on general principles, as some gestorias really know about taxes. Most do not.

Good luck with it, David Searl
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