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Income tax treatment of a Spanish pension in the UK
My client is a Spanish citizen living and working in the UK who has just reached the age of 60 and has five years to decide whether to take his Spanish pension out as a lump sum or as an annuity.
He received no tax deduction in Spain where he spent most of his time when he made much of the contributions and under Spanish law he pays no tax there when he takes the money out.
What is the British tax position? If he is still resident when he withdraws the money does he have to pay tax on the full withdrawal despite not having had a deduction when he paid it in? Or can it be treated in the same way as an investment bond so that he is taxed as income only on the surplus?
Finally is there anything else that Taxation readers can...
