PENSION CASH-GRAB PROBE

British resident fingers Spain over double taxation agreement

THE SPANISH tax office stands accused of flouting the Double Taxation Convention with the UK, which became law in 2014.

The situation is allegedly affecting special pensions awarded for services rendered to either the British state or local authorities.

The tax man in Spain is allegedly trying to grab additional cash from these pensions, cocking a snook at the tax agreement which was designed to avoid taxation by both states on the same income.

British residents in Spain who may be affected include former civil servants, police, armed forces personnel, firemen, social services and NHS workers, teachers, judges, magistrates, court staff, and others.

A retired British resident on the Costa Blanca, who has asked to remain anonymous, is collating information over the practice, with a view to taking legal action against the alleged cash grab.

He said: “Currently it appears that Spain is not only demanding knowledge of such pensions, which must be taxed only in the awarding state - save where a beneficiary takes up the nationality of the other state - it appears that the Spanish authorities are also using such pensions when determining their own income tax threshold to such pensions.

“This means that persons, such as myself, would be liable to pay more income tax in Spain than they would otherwise do.”

Correspondence with the UK tax office shows that HMRC does not take such pensions into account when applying their own income tax thresholds for Spanish nationals taking up residence in the UK.

“Article 24 of the Convention prohibits measures more burdensome in either of the contracting states than imposed on its nationals when resident in the other state,” he noted.

The Costa Blanca resident explained that the Spanish tax office had employed the same cash-grab practice during the last decade, even though the UK did not, until a legal challenge put an end to it.

“Unfortunately, it appears they are at it again,” he said.

“Therefore, I need several case histories of such conduct before I can progress this matter further.”

Any British residents who suspect they may be affected by double taxation are asked to contact CBNews in confidence.

We will send them an email address to contact the British campaigner who is considering taking legal action.