Talk Quesada forum

What's best to have your pension sent to a Spanish bank direct from DWP in euros or leave the pension in an UK bank and transfer with a cheap or free transfer company to a Spanish bank account to pay rental and utility charges. Both ideas merit I believe no Spanish bank charges so I am hoping for a few wise members thoughts on the favoured route of action. Cheers

The pension people don't charge to send the money across and, due to the amount they transfer, will normally have a better exchange rate. There's no such thing as a "free" transfer company otherwise they'd go broke pretty quickly
Plus, if it's a pension, just 200 euro a month gives you free banking with Bankia.
You take a chance on the exchange rate on the day the pension is paid but, unless you have nothing else to do, trying to work out the best days for doing the exchange is pretty time consuming.
With direct payment by DWP you also know the exact date the money will go in so it's always there when you need it.

Food for thought Marcliff, thanks. A friend said Currencies Direct are free but they may keep your money for five days.
All advice gratefully appreciated including if you have residency what's the best way to go with the tax angle.

I think DWP also give a slightly better rate than currency exchange co's I've been here 18 months now and thinking of a regular transfer now but I'm also wondering bout the tax situation. I'm also told that if you die in Spain and have more than 2,500 € in the bank here then that is taxed before being passed on in your will

Ron Hill wrote:I think DWP also give a slightly better rate than currency exchange co's I've been here 18 months now and thinking of a regular transfer now but I'm also wondering bout the tax situation. I'm also told that if you die in Spain and have more than 2,500 € in the bank here then that is taxed before being passed on in your will

You really shouldn't listen to that bloke up the pub, you know.

Actually I think I read it on here marcliff

Thanks Ron.
I don't like the sound of the death tax bit huh. I usually like to keep my money in the country I live in, not the UK. But I heard the tax allowance is lower in Spain also, but the way the pound has decreased since I arrived last year I wish it was in Euros. I think it will be years before the pound rallies. We will be close to Quesada living before this month ends, so I guess I shall have to seek some advice about tax matters. The forum is a god send and a mine of information to which I truly thank all contributors who assist with their experience and help. cheers

Inheritance tax in the Valencia Region will be virtually nil as the allowances are so great. If you are over 65 and have been a resident for more than 3 years then there are no death duties to pay at all. Other regions. like Murcia, are not so generous.
If you live here permanently as a resident then you cannot pick and choose where you pay your taxes, it is Spain. If you have government pensions (like police, forces, civil service etc) then they are taxed in UK and you can't change it. You can't be taxed on those in Spain but they can take them into account to work out the level of the tax band you are on.
The OAP is, sorry, retirement pension is not taxed in UK but is taxable here.

The tax exempt band is quite high here as well.
For example, if you have a property in joint names and one dies, the surviving spouse inherits 50%. If the property is worth €250,000 then that is tax on €125,000. If the surviving spouse continues to live there for at least 5 years then the tax to pay works out at €120. If they decide to sell the property, the tax to pay would be around €550.
If it goes to a spouse and 2 surviving children over 21 then the taxable base would be 83000 (ish) and there would be no taxes to pay as the allowance of 100,000 more than covers that.

Any State Pension you receive is liable to income tax but it's paid to you gross (without any tax deducted). ... If your gross income is more than your personal allowance, you're liable to pay income tax on the amount that exceeds the personal allowance.

Ron Hill wrote:Any State Pension you receive is liable to income tax but it's paid to you gross (without any tax deducted). ... If your gross income is more than your personal allowance, you're liable to pay income tax on the amount that exceeds the personal allowance.

Not if you do it properly and send a certificate of tax residency in Spain to the HMRC in UK.