Tax Recovery

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jogger
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Tax Recovery

Postby jogger » Mon Jul 25, 2022 11:31 am

Hi
I have an occupational pension on which i pay tax, i paid my spanish tax for 2021 via a tax advisor but I'm still paying tax in the UK on my pension to HMRC. How do i go about stopping that and getting my due rebate for last year and this.
Thanks
Roy

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Re: Tax Recovery

Postby gavilan » Mon Jul 25, 2022 12:12 pm

I had the same issue ... my Spanish tax adviser is currently filling in a form for me ... tried to copy it for you but it wont let me ... so it's called
HMRC United Kingdom/Spain Double Taxation Convention (S1 1976 Number 1919)

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Enrique
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Re: Tax Recovery

Postby Enrique » Mon Jul 25, 2022 1:11 pm

Hi jogger,
If you not got there yet...............

https://www.gov.uk/government/publicati ... individual
All my best learning experiences start with a problem I need to solve.

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Wicksey
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Re: Tax Recovery

Postby Wicksey » Mon Jul 25, 2022 1:30 pm

When you say occupational pension, it's not one from being a government employee (civil service, local authority)?

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Re: Tax Recovery

Postby jogger » Mon Jul 25, 2022 3:02 pm

Hi guys, thanks for the info, I'll check them out and get the ball rolling. Wicksey unfortunately it's not a crown pension although it's a public sector one, TFL so it's taxed here.

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Wicksey
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Re: Tax Recovery

Postby Wicksey » Mon Jul 25, 2022 4:34 pm

jogger wrote: Mon Jul 25, 2022 3:02 pm Hi guys, thanks for the info, I'll check them out and get the ball rolling. Wicksey unfortunately it's not a crown pension although it's a public sector one, TFL so it's taxed here.
Yes it can be a bit of a minefield. Our gestoria showed us a list from HMRC of those pensions that you would have thought were Crown but were not. We thankfully are pretty straightforward and not taxable here.

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Re: Tax Recovery

Postby dxf » Mon Jul 25, 2022 9:21 pm

Wicksey wrote: Mon Jul 25, 2022 4:34 pm
jogger wrote: Mon Jul 25, 2022 3:02 pm Hi guys, thanks for the info, I'll check them out and get the ball rolling. Wicksey unfortunately it's not a crown pension although it's a public sector one, TFL so it's taxed here.
Yes it can be a bit of a minefield. Our gestoria showed us a list from HMRC of those pensions that you would have thought were Crown but were not. We thankfully are pretty straightforward and not taxable here.
Hola,

From my own personal experience, DON'T accept the Spanish tax man's word but ask HMRC if your pension HAS to be taxed in the UK. There can be a difference of opinion between the two countries

Davexf

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Re: Tax Recovery

Postby elusive » Tue Jul 26, 2022 5:04 pm

You need to get a certificate of spanish fisical residency from hacienda. Your gestor should have got it for you after you filed your tax return in 2021. Then you send that with your double tax hmrc form to HMRC and you will get a rebate. It can be abit complicated though as the tax years are different ie jan to jan and April to april

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Re: Tax Recovery

Postby Johnandali » Tue Jul 26, 2022 5:56 pm

Tax paid in the non current UK tax year will only be refunded by cheque - problematic if you don’t have a UK bank account but you can nominate someone else to receive funds on for you.

Refund due in current UK tax year, before Apr 2023 will be refunded by your pension payer when tax code changes to NT.

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Re: Tax Recovery

Postby jogger » Fri Jul 29, 2022 8:12 pm

Thanks again, definitely not a crown pension as i was a councillor on the pension consultation committee and asked the question. I've emailed the gestor to get the cert for me, which will probably be an extra charge. But hey ho.

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Re: Tax Recovery

Postby jogger » Sat Jul 30, 2022 10:09 am

To add further to my complication, i have a property i rent out in the UK i have informed the hmrc i am a non resident landlord and stopped paying uk tax on it, i declared it in my spanish tax return and paid the tax here. My wife said i have to fill out a non resident self assessment tax form, what does this entail please? My wife seems to think this is a bit complicated.
Thanks
Roy

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Re: Tax Recovery

Postby elusive » Sat Jul 30, 2022 4:13 pm

You need to fill in a self assessment every year as your rental income is taxable in the UK.you get your uk allowance and if any tax is due you can offset what you pay in spain so you wont pay double. If the house is jointly owned you need to do one each. Its pretty easy. You just declare your rental income 50% on each form if jointly owned. Dont declare anything else if all your other income is declared in Spain. You can do it online but we just fill in the paperform and send it back.

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Re: Tax Recovery

Postby markwilding » Sat Jul 30, 2022 6:43 pm

It also depends how much income is received from renting the flat as it is still liable to UK taxes. My wife and I both own our rented property so can spit the income, so we are well below the yearly tax allowance. The first time we did it, I called my tax office back in the UK and a very helpful person went through it step by step, I then made photocopies and do it the same way each year. All UK income needs to be declared no matter how small, including interest and dividends if you don't pay tax at source.
If you do pay tax at source, you will get a refund on that as well. We do it exactly as Elusive explains. However, one thing I disagree with is that non-residents can do it online because it can't and must be done on paper. Also, beware that the deadline is October, not the later date for UK residents. You will be fined for a late return. We completely forgot to do one in 2020 until around November and we got a 100 pound fine each. Luckily, Covid gave us a readymade excuse and it was waivered on appeal.

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Wicksey
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Re: Tax Recovery

Postby Wicksey » Sat Jul 30, 2022 6:55 pm

I do the normal Self assessment return for interest and pension income etc, plus Property pages (as we also have a UK rental property paid gross) and the Non residents section. Due to being non resident I have found I cannot easily do it online without a special software program. I get sent paper copies for me and my OH and complete both, showing all our income ( I do not get UK state pensions yet, which I understand is taxed here and not in the UK). You get an explanatory booklet and it's pretty straightforward. We do not earn enough to pay any tax which keeps it fairly simple. The property pages are straightforward. If your expenses are below a certain amount then you just show the total amount, you don't have to break it down. So it's just gross income, less expenses and net profit for us (split 50/50 between the two returns).

When we sell up though then we'll have to do the CGT for the UK within 3 months of completing the sale, then declare it here and get the UK tax set off against the Spanish tax due, which all sounds a lot more complicated!

Mark the reason the submission date is 31 Oct is because they are paper returns, and that applies to UK residents too. If you do it online then you get the later date of 31 January. It's not earlier because we are expats.

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Re: Tax Recovery

Postby markwilding » Sat Jul 30, 2022 7:53 pm

Yes, Now I think about it, it is possible to do it online but when I looked into it, it was more hassle than it's worth, so we made the decision to send it by paper. As you say, you have to get special software or pay an accountant to do it.

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Re: Tax Recovery

Postby elusive » Sun Jul 31, 2022 9:12 am

Yes it is harder do online . Its not just a case of going on a standard webpage and filling it in. We have family who come out every summer and they just take the form back with them and they post it from the uk.
.

wicksey you say you do self assessment for pension and intrest? I thought you just have public sector pension so automatically taked in the uk? And intrest is taxable in spain only? The only thing we declare on the Self assessment is the rental income. State/private pensions and intrest is declared in spain only

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Wicksey
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Re: Tax Recovery

Postby Wicksey » Sun Jul 31, 2022 9:34 am

I do the basic SA return and declare any interest (although minimal amounts these days .... ridiculous) and our civil service occupational pensions and my OH's annuity. I declare everything to the UK that I declare here in Spain. It's just our gestoria said about the state pensions (that we don't yet get) being taxable here and not in the UK but that's a little way off for us still.

As Mark said, I understand that everything has to be declared in the UK as we always did, so we always receive the 3 returns: the basic one, the Property pages for rental income and the Non-Resident pages. HMRC need to know the full income to see if you are above the taxable threshold. We are not, but the pension is treated as PAYE income and so has a tax code applied, but they need to know your other unearned income to see if your total income is above the personal allowances. I have always declared everything to the UK. As our total income is still below the allowances it doesn't really matter to us as we suffer no tax there or here.

As they know we have other unearned income they have applied lower tax codes to our pensions, and one time it did mean that my OH was being taxed at source on his pension erroneously. By doing the tax return and declaring all our income they could then calculate that he had overpaid tax and got a refund. I was in the trade, so to speak, so have some idea how it all works so have always monitored everything to make sure we don't pay tax when we aren't due to.

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Re: Tax Recovery

Postby elusive » Sun Jul 31, 2022 12:02 pm

As your a spanish tax resident you shouldnt be declaring anything in the UK other than your rental income and crown pension which is only taxable in the uk.normally You would have a NT (no tax) tax code as a non tax resident which you get after you send in your double tax form and your certificate of fiscal residency from spain showing you are tax resident here.although thats probably different if you have a crown pension. Then any private pensions etc get paid tax free as you only pay tax on them in Spain.

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Re: Tax Recovery

Postby Wicksey » Sun Jul 31, 2022 12:33 pm

From the HMRC site:
"You usually have to pay tax on your UK income even if you’re not a UK resident. Income includes things like:
pension
rental income
savings interest
wages
If you’re eligible for a Personal Allowance you pay Income Tax on your income above that amount. Otherwise, you pay tax on all your income.
The country where you live might tax you on your UK income. If it has a ‘double-taxation agreement’ with the UK, you can claim tax relief in the UK to avoid being taxed twice."

I've not claimed the double taxation thing as we don't pay tax anywhere, so it seems that I still have to declare everything to the UK. It's the CGT I need to look into. I know I will have to pay it here and will be a much higher bill than the UK would charge unfortunately. However, once we're not landlords anymore, I am hoping we can ditch having to do the UK SA returns altogether.

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Re: Tax Recovery

Postby Free at Last » Sun Jul 31, 2022 12:36 pm

elusive wrote: Sun Jul 31, 2022 12:02 pm As your a spanish tax resident you shouldnt be declaring anything in the UK other than your rental income and crown pension which is only taxable in the uk.normally You would have a NT (no tax) tax code as a non tax resident which you get after you send in your double tax form and your certificate of fiscal residency from spain showing you are tax resident here.although thats probably different if you have a crown pension. Then any private pensions etc get paid tax free as you only pay tax on them in Spain.
The process is just the same if you have a crown pension, elusive. I have both a crown pension (which is below the UK personal allowance) and another pension from a former employer. I did as you describe and submitted the double taxation form with the Spanish certificate of fiscal residence, after which HMRC refunded the tax I had paid in the UK on the non-crown pension and gave me an NT tax code to set against that. I get the UK personal allowance to set against my crown pension, and I now get my state pension as well and that is being paid without any tax being deducted from my crown pension.

Neither my husband nor I have submitted any UK tax returns since we started to receive our pensions, and as we don't receive any rental income from the UK there is no requirement for us to do so.


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