Tax return- this might be a question Cid can help with!

Information and questions about the Law in Spain and Andalucia.
oliveview01
Andalucia Guru
Posts: 2972
Joined: Sat Feb 26, 2005 2:31 pm
Location: Sevilla

Tax return- this might be a question Cid can help with!

Postby oliveview01 » Tue Oct 25, 2016 11:32 am

Some time ago I received a small lump sum payment in relation to a county council pension. I was only employed there for a few years.
Although this is tax free in the UK, I knew tax was due in Spain and I declared it on my Spanish tax return, and I then paid the tax at the standard rate. I have since been advised that, although tax is due, it is at a slightly reduced rate and that I could have offset some of the tax against the 6% contributions I made from my monthly salary.
Does anyone know where this is set out in the Spanish tax instructions so that I can point this out to my abogado.
Thanks.

El Cid
Andalucia Guru
Posts: 13460
Joined: Sun Oct 24, 2004 10:42 pm
Location: La Herradura, Costa Tropical, Granada

Re: Tax return- this might be a question Cid can help with!

Postby El Cid » Thu Oct 27, 2016 9:06 am

Lumps sums are taxed in Spain, but not at the normal earned income rates. They are taxed at the lower savings rates.
When you were paying into the UK scheme I assume you would have had some tax relief, but that has no relevance to the Spanish tax you have paid.

It is possible, in Spain, to have a reduction in the amount of the lump sum that is taxed, based on the relationship between the amount of the lump sum that was interest, rather than the capital you paid into the scheme. However, that usually only applies to personal pension plans, I don't think that it applies to company schemes such as the one you had.

Sid


Return to “You & the Law in Spain”

Who is online

Users browsing this forum: No registered users and 6 guests