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Receiving lump sum and pension in Spain

Discussion in 'Retirement' started by ilovepatnevin, Nov 17, 2018.

  1. ilovepatnevin

    ilovepatnevin New commenter

    Has anyone here started receiving a UK teacher's pension whilst living in Spain? I'm finding it a little difficult to work out the tax implications (especially with regard to the initial lump sum).
  2. eljefeb90

    eljefeb90 Senior commenter

    Hi there. I vaguely considered moving to Spain a few years ago when I retired. I have done a little research, but am no investment guru or tax specialist. I am a Spanish speaker and have a (shared) property in the Canaries.
    Are you registered as resident in Spain ? If so, the tax free lump sum is indeed taxable. Not the whole sum, just the growth element of it. How this is calculated is very complex, but your lump sum will be ascribed a capital element(what was paid in) and the rest is growth, which is taxed on a sliding scale, starting at 20%. Some people have transferred their lump sum into annuities, which pay very little Spanish tax, but which also have poor returns these days.

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