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Tax on UK Military Pension, Government Pension

Tax on UK Military Pension, Government Pension

Postby Carpman » Tue May 08, 2018 7:19 am

Calling Military Veterans in receipt of a UK Military Pension or personnel in receipt of a UK Government Pension.

This is a 2 part question:

After completing 22 years service I left the army at 40 having and immediately got my pension, i'm now aged 54 and in several months will receive the increases attached to my pension.

I've only been living in Spain for 9 months and have only paid non resident tax,

Q1. My pension is currently my only form of income, I get £9000 per year which is under the UK Tax allowance of £11,850, it is paid monthly into a UK bank account.

Will I have to pay Spanish tax on any of the £9000?

Q2. On my 55th birthday my pension will rise to above the £11,850 UK Tax allowance therefore I will be taxed in the UK on everything above that.

Will I have to pay Spanish tax on first £11,850?

Many thanks in advance,

Ian
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Re: Tax on UK Military Pension, Government Pension

Postby marcliff » Tue May 08, 2018 9:32 am

No. Army pensions are taxed at source in UK and are not liable to tax in Spain under the dual taxation agreement.
They can be taken into account to to determine the level of tax paid on other income but are not taxed in themselves.
You will, however, pay tax in UK on the amount over the tax allowance.
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Re: Tax on UK Military Pension, Government Pension

Postby Anniep » Tue May 08, 2018 10:26 am

My husband receives a naval pension, tax is paid at source, but as Marcliff says it does have to be declared here in Spain when you become a fiscal resident, although tax isn’t paid on it here, it will be added to any other income you may receive and possibly take you into the next higher tax bracket! Sneaky! Lol
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Re: Tax on UK Military Pension, Government Pension

Postby Paulr » Wed May 09, 2018 10:05 pm

Sneaky indeed, Anniep! Thanks to a poorly publicised deal done between Cameron and Rajoy in 2015, the declaration in Spain of my RAF pension means I'm taxed at 24%, rather than 19%, of my worldwide income. And they try to tell us we're not taxed twice on the same income......! :x
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