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Non UK Resident and UK state pension

Didn't find your answer?

Just having complete brain fade on this one...

A new client is resident in Spain and receives a UK state pension and property income in the UK.

I know that, under the double taxation agreement, tax on the state pension is paid in Spain but do I include it on the tax return? If so wher (HS304?)  If I include it in the usual state pension section it will use up his personal allowance and the property income becomes taxable which doesn't seem right.

Replies (10)

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By AndyC555
21st Oct 2021 16:07

It's not UK taxable income so why put it in a UK tax return?

I'd probably add a note in the white space that under Art 17 DT treaty the state pension received is taxable in Spain.

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Replying to AndyC555:
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By Tax Dragon
21st Oct 2021 20:54

Remind me a little (I recall the discussion in here about it but not the conclusion... TBH I remember getting a little lost in the debate)... is s6(6) TIOPA in point? If so, [how] does your suggested approach marry up with the requirement therein?

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Replying to Tax Dragon:
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By Justin Bryant
22nd Oct 2021 11:24

No DTA claim needed as far as I can see: https://www.legislation.gov.uk/ukpga/2010/8/section/6

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Replying to Justin Bryant:
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By Tax Dragon
22nd Oct 2021 11:38

I invite you to treat me like an idiot and say why you are right, in small words.

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Replying to Tax Dragon:
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By Tax Dragon
22nd Oct 2021 12:49

It's OK, I get your point now. You think I should be looking at s6(2)(b), not (as I was) s6(2)(a).

I wonder whether you are correct. I honestly don't know. I would find it clearer if ss2(b) used a phrase such as "excluding from tax" rather than saying "taxing". As written, I wonder whether it applies to limit tax rates (eg withholding tax on dividends) and does not apply when the effect of the treaty is to provide complete relief from UK tax - maybe ss2(a) deals with that?

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Replying to Tax Dragon:
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By Justin Bryant
22nd Oct 2021 16:38
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Replying to AndyC555:
Psycho
By Wilson Philips
23rd Oct 2021 00:08

.

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By Paul Crowley
21st Oct 2021 19:06

Interesting to see if it is on the HMRC portal
Iformation to help.........

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By Tax Dragon
22nd Oct 2021 13:00

OP - whilst I have enjoyed the responses you have had from others, you provided the best answer to your actual question. Use the HS304.

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By More unearned luck
05th Nov 2021 18:27

I don't think that DTs determine where something is paid, but where it is taxed.

It seems from the the DT digest that HMRC take the view that art 17 of the UK/Spain treaty applies to the SP, so that it is only taxable in the country of residence. HS304 should be completed and attached to the TR.

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