NEW DOUBLE TAXATION AGREEMENT UK-SPAIN
The new treaty signed between the Kingdom of Spain and The United Kingdom of Great Britain and Northern Ireland, published in the Official Gazette (BOE) on 15th May 2014, is also a key issue for expats. This replaces the old 1976 Double Tax Agreement.
The new treaty is especially relevant to expat pensioners who are in receipt of civil service pensions from public sector occupations i.e. civil servants, military personnel, fire service, police service and local authority employees who were previously exempt from Spanish tax.
Under the new treaty the amount of the pension is still exempt but must be included when calculating how much tax is due in Spain. We did not need to include those pension incomes under the old treaty. This could have the effect of pushing any other income into a higher tax bracket meaning those affected could face a higher tax bill in Spain.
For more information please feel free to contact Corral&Alcaraz Law Firm. Please seek expert advice as it is not worth the risk.