Tax in Spain

[kelly]

My friend, who is a pensioner, is coming to spain. Before he gets his pension it is taxed. If he stays for any length of time, he will have to apply for residency. Does this mean he be expected to pay tax to the spainish authorities also?

Regards Kelly

[Stravinsky]

Originally Posted by kelly

My friend, who is a pensioner, is coming to spain. Before he gets his pension it is taxed. If he stays for any length of time, he will have to apply for residency. Does this mean he be expected to pay tax to the spainish authorities also?

Regards Kelly

You have no legal choice but to file for a residents certificate within 30 days of having arrived here with the intention of residency. Only Civil Service pensions are enforceably taxed in the UK. State and private pensions are taxed in your country of residence. Your friend should apply for UK tax exemption certificates before he leaves, as he will have to declare tax in Spain. However, the Spanish tax system and allowances are set up so that if your friend is on a state and medium pension in the UK, it is quite likely that he will pay no tax at all here.

He will not have to pay tax in both countries although there may be a short changeover period, but he can claim any double payments back

[kelly]

Thank you very much for your knowledgeable replies. As I understand it, my friends teachers pension, which is taxed here, could become exempt from UK tax with the appropiate forms. Are you suggesting ,therefore, that the best way forward would be for him to open a spanish bank account and get his uk pension transfered directly there. Or does it really not matter if he keeps his Uk bank account.

[Stravinsky]

Originally Posted by kelly

Thank you very much for your knowledgeable replies. As I understand it, my friends teachers pension, which is taxed here, could become exempt from UK tax with the appropiate forms. Are you suggesting ,therefore, that the best way forward would be for him to open a spanish bank account and get his uk pension transfered directly there. Or does it really not matter if he keeps his Uk bank account.

Well, as I understand it, it is possible to have a state pension paid to a Spanish Bank, but there are numerous currency exchange companies that will do it free of charge.

Currencies direct is one.

I currently have funds paid to a UK bank and draw it accross, but he will need a Spanish bank over here anyway just for day to day living. I'd keep a UK bank account and credit card, as you won't be able to open one in the UK with ease (if at all) once he is resident in Spain.

You are correct, the Teachers Pension will become tax free in the UK.