Cease paying UK income tax

[gattaca66]

I’m hoping I can learn from someone’s experience here...! I’m having a tussle with Agencia Tributaria over income tax paid in the UK on a private pension which is paid in the UK. Currently questioning 2019, but I can see the same coming for 2020 and beyond. I’ve accurately reported the tax paid in the UK, and provided proof, and under the double-taxation agreement this is deducted from the larger tax bill due here, fair enough. AT do not, however, seem to like this. 

I am sure I can make appropriate declarations to the UK Tax people, not doubt with some proof, to cease paying tax in the UK and, just maybe, to recover tax paid in 2019 and 2020 so that I can just pay in full here in Spain? Seems the right thing to do, if possible, as I am accessing services here. I can seek professional advice, just wondering if anyone has actually done this, please, and so long after actually moving here!

[GMT]

I’m hoping I can learn from someone’s experience here...! I’m having a tussle with Agencia Tributaria over income tax paid in the UK on a private pension which is paid in the UK. Currently questioning 2019, but I can see the same coming for 2020 and beyond. I’ve accurately reported the tax paid in the UK, and provided proof, and under the double-taxation agreement this is deducted from the larger tax bill due here, fair enough. AT do not, however, seem to like this. 

I am sure I can make appropriate declarations to the UK Tax people, not doubt with some proof, to cease paying tax in the UK and, just maybe, to recover tax paid in 2019 and 2020 so that I can just pay in full here in Spain? Seems the right thing to do, if possible, as I am accessing services here. I can seek professional advice, just wondering if anyone has actually done this, please, and so long after actually moving here!

My 2p experience...When I and my partner did the tax declaration last year for 2019 (we did it in Spain mainland though, but it wouldn't matter where) we had to pay taxes for the sale of our property in the UK and my partner had also to pay taxes for a small private pension that she gets every three months, as it's not taxed at source in the UK. However, your situation sounds a bit different, as you are stating that you pay taxes for yours in the UK. As you said, I would look for advice, but shop around, we found lots of greedy 'professionals' around.

[Cotillo_Tom]

My understanding (but I'm in the middle of sorting out my first tax return here, so my understanding might well change shortly), if the source of the pension is from the UK, then it is taxable in the UK, assuming it exceeds the personal tax allowance. Unfortunately, there appears to be no way out of that. 

However, you are correct that the tax authorities here do take into account the tax you have already paid in the UK, once they have verified the information with HMRC. While that is happening, they may well take the full tax off you here on the basis they will refund it to you later, once they have confirmed everything with HMRC. 

My personal advice is that the Spanish tax system is SO complex (even more complicated that the UK system), you really need professional advice even if it costs you. 

I was recommended to Eduardo Haro Atserias of Servicios Financieros Herbania SL at Calle Virgen del Rosario 4, 1, Puerto del Rosario 35600. 928 85 13 97  contabilidad5@asesoria-sfh.es 

I've only been dealing with him for about 10 days, but he responded instantly to my enquiry with a detailed list of the information he needed. Tgere have been a few email exchanges sorting out various queries but he soon had everything he needed to submit my Modelo 720 and is now preparing my tax return for later in the year.  So far, his service has been excellent and his fees were quite reasonable (hope he doesn't see that bit).

He was recommended to me by a member of this forum who spoke highly of him and without going into any details, saved her quite a bit of Money from a property sale. 

Tom.

[TamaraEnLaPlaya]

Whether a UK pension is taxable in the UK depends on the source. Most private UK pensions are taxed in Spain.
Any good Spanish tax advisor can give you the UK  form you need to submit to HMRC and obtain the form you need to send with it from Spanish tax authority.

[DavidP]

We are in a similar situ as Tom, 
The "problem" for us is the Non speed of HMRC!! We wrote in Feb and were informed on Gateway that our case had been sorted. To date still waiting and cannot get through on telephone.
We are assuming he is writing to us here but just in case we do have our UK mail checked weekly.

On the same vein any idea at what stage  Modelo 030 should be adjusted, Our "Man" says no need but our experience of officialdom says if a form exists it needs doing.

[TamaraEnLaPlaya]

I thought modelo 030 was used to advise Spanish tax authority of change of address or marital status, so submit when appropriate!

[DavidP]

Just out of (possible) interest.
I have been reading a couple of articles (inc the court ruling) that make it absolutely clear that modelo 720 is illegal.
I then found somewhere on the agencia website ,then lost it,  that although it may be illegal in law It is still being enforced by the AT!!

[Tardis]

Just out of (possible) interest.
I have been reading a couple of articles (inc the court ruling) that make it absolutely clear that modelo 720 is illegal.
I then found somewhere on the agencia website ,then lost it,  that although it may be illegal in law It is still being enforced by the AT!!

This article might clarify the situation:

https://www.blevinsfranks.com/modelo-720-penalty/

[DavidP]

Thanks Tardis that is a nice simple explanation.
I do not I will have a problem my overseas assets are slowly going negative!!

[gattaca66]

For anyone seeking, as I have done, to become zero-rated for income tax in the UK now that they are fiscally resident in Spain, it is do-able but currently requires patience! I applied in May 2021 with the added complication of needing it back-dated to include 2019 financial year. 13 months on I have just had confirmation that it’s done, together with refund cheque. It’s a surprisingly straightforward process, and I suspect that with a little less WFH and a bit more bums-on-seats in the office things might move less glacially!