Share this content

Spanish tax on UK pension

Spain want to tax a UK private pension for 2016-17

Didn't find your answer?

I have a client who is resident in Spain and the Spanish authorites now want to tax UK private pension for 2016-17. It was a one-off triviality payment of £8,446 and emergency tax was taken here. If Spain tax this income that was received in Febuary 2017, I'm out of time to amend teh 2016-17 tax return and so the taxpayer could pay double tax on this income.

Also, the Spanish authorities are giving the taxpayer 10 days to pay up and, if they are proved wrong, apprantly they issue an IOU (with no end date) rather than a refund.

Has anyone else come across this? Worst case is Spain tax the pension so is there anything in the legislation to extend the amendment window to claim the deduction of tax paid in Spain.

They also want to tax the Teachers Pension but I think this is excluded in the DTA and taxed here.

With thanks

Replies (7)

Please login or register to join the discussion.

avatar
By David Ex
15th Nov 2021 16:27

What does the DTA say about pensions generally?

Does this give any clues? Think DTA has to be first port of call though.

https://www.gov.uk/guidance/living-in-spain#pensions

Thanks (1)
avatar
By Catherine Newman
16th Nov 2021 12:26

I have seen it. In this case the client spent more than 6 months in Spain and landed himself with a tax bill as a result. The client dealt with it himself but the Spanish authorities are throwing the net ever wider by introducing new laws. HMRC did accept the double tax treaty claim but it was about 2 years ago.

Thanks (0)
Replying to Catherine Newman:
avatar
By Hugo Fair
16th Nov 2021 13:20

Sorry - are you OP under a different name?
If not, I can't see the correlation.

Thanks (1)
Replying to Hugo Fair:
avatar
By Catherine Newman
17th Nov 2021 17:06

No. I was trying to give a helpful response as I have got a client who has been through it. They had to get a certificate from the police in Spain to say they had been deemed resident there so that HMRC might give relief here. HMRC did give relief.

You don't have to amend the return. You make an overpayment relief claim in writing. The client will have to sign it. You've got 4 years to do it.

Thanks (1)
Replying to Catherine Newman:
avatar
By Cowders72
18th Nov 2021 08:11

Thanks for your comments. The issue is that the pension was received in Feb 2017 and so I am out of time for overpayment relief claim in the UK If Spain decide they are taxing the pension.

Thanks (0)
Replying to Catherine Newman:
avatar
By Hugo Fair
18th Nov 2021 13:27

Sorry, my mistake. It was your opening words "In this case" that confused me, as I thought you were referring to OP's scenario. Along with a few other responders, I tend to be a literalist.

Your example is however most apt and helpful, so apologies if I diverted anyone's attention from it.

Thanks (1)
paddle steamer
By DJKL
16th Nov 2021 13:46

Nobody expects the Spanish TaxonPension. (MP)

Thanks (3)
Share this content