Pension Lump Sum

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  • 2 Post By Lynn R

Pension Lump Sum


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  #1 (permalink)  
Old 22nd October 2019, 12:41 PM
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Default Pension Lump Sum

Apologies if this has been asked before or if you have seen this request on another site/forum.
Has anyone had first hand experience of taking a lump sum benefit from a UK final salary company/private pension scheme (not government) whilst being a tax resident in Spain?
I know that the lump sum is subject to tax but the question is - can the employees contributions be deducted from the lump sum so that the tax ic calculated on the gain and not on the full amount?
There are several articles on the internet that support this view but trying to find someone who has successfully managed this is proving very difficult.
We have taken the lump sum and paid the tax on it via a spanish accountant but he/she is not able to provide an answer.
Thanks for reading.

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Old 22nd October 2019, 01:48 PM
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Originally Posted by Nick58 View Post
Apologies if this has been asked before or if you have seen this request on another site/forum.
Has anyone had first hand experience of taking a lump sum benefit from a UK final salary company/private pension scheme (not government) whilst being a tax resident in Spain?
I know that the lump sum is subject to tax but the question is - can the employees contributions be deducted from the lump sum so that the tax ic calculated on the gain and not on the full amount?
There are several articles on the internet that support this view but trying to find someone who has successfully managed this is proving very difficult.
We have taken the lump sum and paid the tax on it via a spanish accountant but he/she is not able to provide an answer.
Thanks for reading.
I received a lump sum from my employer's final salary pension scheme (not a Government pension) 8 years after I became tax resident, and paid Spanish tax on it in full. The advice I received was that Spain regards such pensions as deferred income, rather than the investment type (money purchase) pensions where an annuity is purchased to provide the pension, therefore the "gain" is not relevant.
tebo53 and Megsmum like this.

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Old 22nd October 2019, 03:32 PM
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Ok Lynn, thanks for your reply. Today I have engaged the services of a spanish tax specialist and he's looking into it. There are articles online from leading spanish tax and estate planning experts who clearly state that an allowance can be made on contributions before 2006. If i'm successful I'll let you know, who knows you may be due a rebate or pigs might fly? Thanks again, Nick.

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Old 22nd October 2019, 03:53 PM
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Originally Posted by Nick58 View Post
Ok Lynn, thanks for your reply. Today I have engaged the services of a spanish tax specialist and he's looking into it. There are articles online from leading spanish tax and estate planning experts who clearly state that an allowance can be made on contributions before 2006. If i'm successful I'll let you know, who knows you may be due a rebate or pigs might fly? Thanks again, Nick.
Thanks, but as I paid the tax more than 4 years ago it would be too late for me to claim a rebate now, I think.

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