Retirees under UK state pension age - question

Are there any retirees here who are:
- Rssident in Spain;
- UNDER their state pension age, and
- Currently drawing down on their personal pension?

If so - then generally,what are the tax implications?

We're getting different stories from different tax advisers in Spain!!!

I am in that situation and have a work pension from the UK which I took aged 55 and it pays me each month. I just declare it on the Modelo 100 each year along with other incomes and pay any income tax due on that (if that's what you mean?). If by 'drawing down' you mean taking periodic lump sums then I have not done that.

I dont have any work pensions, but have SIPPs.

My retirement plan is to draw my 25% tax-free, and live on that for a while.

If I stay resident in the UK, I can draw down each year up to my income tax allowance, again tax-free - until the cash in that SIPP runs out.

My understanding is that if I were to become resident in Spain, then none of it would be eligible for tax-free withdrawal, and that the tax implications would be considrable.

This is one of the most basic questions on paying tax in Spain so it's worrying, but not particularly surprising, that you're getting different answers from different so called 'advisors'.

In short; be it from a UK state pension, a SIPP, interest on savings, dividends etc. etc. etc. ALL income you receive worldwide is subject to taxation in Spain, it really is that simple!

The sole exception is in the case of UK Crown pensions which remain taxable in UK but you receive credit on your Spanish tax bill for the tax paid there.

One thing about your post bothers me though, to relocate to Spain you will need to demonstrate a stable annual income of €28.800 if single or €36,000 if a couple, and that's for each of the first 5 years of residency. Savings may be taken into account when arriving at that figure with each case considered on it's merits, will your 25%, any savings, and annual drawdown, provide that?

As a very rough guide an income of €36,000 in Spain is likely to result in a tax bill of some €8,000.

As a final point, if you plan to take the 25% be sure to do it before you become resident as if not that will become taxable here also.