Spanish tax office trying to collect tax on UK Govt Pension

[metalmonkey]

Hi

In 2014 my tax lawyer mistakenly included my UK Govt Pension on the tax form. Govt pensions are taxed in the UK not Spain unless the pension takes the whole income over the current taxation %.

For the last two years my tax lawyer has been arguing with the Hacienda as they say my pension is not a UK Govt pension....I was a local Government Officer. Mt West Midlands Pension Fund have confirmed that it is a Govt pension BUT Hacienda are still not accepting it. I have recently got another letter from HMRC on letter headed paper as requested by Hacienda which states very clearly that I am in receipt of a UK Govt pension. On Thursday I received a letter from Hacienda stating that if I did not pay 3,800 euros by the end of the month they would embargo my bank account and reclaim assets such as a car if there was not enough money in the account.

I was talking to a friend who was a Police officer who said that he had recently received a letter RE 2014 tax and they were not accepting that his pension is Govt pension......I am starting to smell a rat! If they claim for 2014 they will carry on back claiming for following years.
Is anyone else in this situation??

Many thanks

[El Cid]

Basically, the local tax offices haven’t got a clue when it comes to UK government pensions, especially the new rules about having to declare them.

I have a couple of friends, one a police officer and the other a teacher. They went to the tax office together and were told that the only pensions that are government pensions according to them were police pensions and teachers pensions were not exempt. They clearly have no idea what they are talking about.

I’m not sure what to suggest in your situation. Clearly the problem was caused by your lawyer making the mistake of declaring it, which puts you in the position of having to prove them wrong, which never works. Perhaps it might be best to pay the tax under protest and then find a competant tax advisor to sort it out.

You have to remember, that if a mistake is made by your lawyer or by the tax office, it is actually your fault, not theirs!

Sid

[Manchesteral]

The above story is precisely why I will not be declaring tax residency in Spain !

[elusive]

Empty your bank account and sell your car!!

Agree with cid maybe pay and try and get a decent lawyer to sort it out. The stress of waiting on a imbargo is bad enough. Some goverment pensions dont come under it but if you have a letter from hmrc then...

[dxf]

Hola,

Spain is trying to make everyone get the gross pay from the UK and have it taxed here. Cyprus & the UK recently came to an agreement about not taxing such pensions in the UK. Spain as yet do not have an agreement - unless anyone knows different

Davexf

[El Cid]

Yes, I do know different. Spain and the UK have had a tax agreement for many years. It was revised recently to confirm that UK government pensions are not taxed directly in Spain, but they have to be declared and taken into account to establish the tax rates that are applied to other income taxed in Spain.

They are declared in a specific box on the tax declaration and are defined as “exempt income”.

This has actually always been the case, but for some years this has been ignored by the Spanish tax authorities because of advice (wrongly) given from a senior source in the tax administration. The changes to the double taxation agreement now make it quite clear that they have to be declared as exempt income.

Incidentally, such tax agreements are bilateral and have nothing to do with the EU (so are not affected by Brexit).

Sid