Private Company Pension – Where Do I Declare And/Or Pay Tax?

Question on our facebook group.

Member: Hi, I read the thread on government pensions with great interest. Apologies but what is the situation with non governmental pensions, for example employer pensions. I read the UK government website and it suggests that I would only be taxed in one country after submitting the correct forms. It appeared simple but the threads I have read suggest I am not fully understanding things.
Can somebody tell me in simple terms what the situation is with some basic examples, thanks

Philip Carroll If you receive a private company pension, then it is only taxable in Spain, assuming you live here, and are tax resident. In order to receive your pension gross in the UK, then you need to complete a Form Spain Individual (just google it) and send the completed form to HMRC.

They will refund any tax that you have paid, and instruct your pension company to pay you gross ( you receive an NT tax code). The downside is that they will only do that if you are tax resident in Spain, and the evidence to support that is a Certificate of Fiscal Residence (Certificado Residencia Fiscal en España Convenio). You submit this form with the Form Spain Individual. You can obtain the Certificate from the Spanish tax, but only after you have submitted a tax return. This means you have to pay the amount of tax due in Spain, and then obtain a refund of the tax already paid in the UK.

So, assuming you submit the return from 2015 in the next week or so, you can normally apply for a certificate from the Hacienda around September. The reason for the gap is to allow them to process your return. Once you have obtained the certificate you send it together with the Form Spain Individual to HMRC. They normally process your refund within 6-8 weeks, assuming there are no queries.

Another member: So this works the same way with compulsory works pensions (annuities) as well Philip?

Philip Carroll It relates to any income that is taxable only in Spain

Please note: The information provided is based upon our understanding of current legislation. It is not legal advice but is provided freely to enable you to be properly informed. We recommend that if you are considering taking action, you should seek professional advice.