UK Pension Tax for Spanish Residents: A Guide for Britons

UK pension tax for Spanish residents follows the 2013 UK and Spain tax treaty, not the address your pension provider holds. Once you are tax resident in Spain, most private and workplace pensions become taxable only in Spain, government service pensions usually stay with the UK, and the State Pension sits between HMRC pages that frame it differently. Until HMRC accepts a claim, a UK provider keeps deducting UK tax, so the same income can be taxed in both countries for a while. The tax-free lump sum is the least settled point. This article is for informational purposes only and is not legal advice; verify current requirements with the relevant Spanish authority or a licensed professional.

Which country taxes your pension once you live in Spain?

It depends first on where you are resident for tax, then on the type of pension. The Agencia Tributaria’s leaflet for residents with UK income lists the Spanish tests: more than 183 days in Spain in a calendar year, your main economic interests in Spain, or a spouse and minor children living there (a presumption you can rebut). A Spanish tax resident declares worldwide income, subject to the treaty with the country the pension comes from. When UK residence ends and how the split year works are in the guide to leaving UK tax residence.

Four risks catch new residents:

• Paying twice during the changeover. HMRC says you may be taxed on your pension by the country where you are resident and by the UK, and that you pay UK tax on a pension from a UK provider. The treaty decides where you pay, but the provider keeps deducting until HMRC accepts a claim.
• Missing the Spanish return. A UK payer does not withhold Spanish tax, so the Agencia Tributaria says the filing threshold is lower than for other work income.
• Treating a government pension as invisible in Spain. It is exempt in Spain, but the Agencia Tributaria counts it to set the rate on your other income.
• Taking a lump sum after the move. No official Spanish page read says how Spain treats the UK tax-free lump sum.

None of the pages read separates Britons covered by the Withdrawal Agreement (resident in Spain before 2021) from people moving now: the treaty and the Agencia Tributaria pages turn on tax residence, not on the residence card.

Your UK pension type by type: UK rule and Spanish rule

The treaty articles cited below are in the consolidated BOE text of the 2013 convention; each other cell links the page it rests on.

How the 2013 treaty splits the taxing rights

The current convention was signed in London on March 14, 2013. HMRC’s Spain treaty page says it entered into force on June 12, 2014, took effect in the UK for Income Tax from April 6, 2015, and was modified by the multilateral instrument from April 6, 2023.

Article 17 of the treaty gives pensions and similar payments to the country where the person is resident, subject to the government service rule. Article 18(3) sends pensions for work in a government business activity back to the ordinary rules, so they are treated like private pensions.

Government pensions and Spanish nationality

Article 18(2) keeps a UK government or local authority pension taxable only in the UK, unless the person is both resident in Spain and a Spanish national; the treaty then gives Spain the sole right. The Agencia Tributaria’s UK leaflet says the same. HMRC’s claim notes (dated October 2020) add a condition the BOE wording lacks: the claimant must be a Spanish national “without also being a UK national”. HMRC’s notes offer the exemption claim only on that reading, so a Briton who becomes a Spanish citizen and keeps British nationality should expect HMRC to keep taxing such a pension, and take advice.

The State Pension: three pages, three framings

HMRC’s general guide says non-residents do not usually pay UK tax on the State Pension. HMRC’s Spain claim notes of October 2020 say it is normally liable to UK Income Tax and that a resident of Spain can apply to have it exempted in Part C1. The DWP says that with a treaty you pay tax on your pension once, to the UK or to the country where you live. The BOE text does not name the State Pension, and no Spanish page read classifies it. HMRC’s 2018 digest lists it with other pensions under article 17, which gives the taxing right to the country of residence, so Spain; no Spanish page confirms this. Plan on declaring it in Spain and, if any UK tax is taken, claiming the exemption in Part C1.

What Spain does when the UK keeps the right to tax

Article 22 sets two mechanisms. Where income is taxable only in the UK, Spain may still count it when computing the tax on your other income (exemption with progression). Where the UK may tax income, Spain gives a credit for the UK tax, capped at the Spanish tax on that income. The Agencia Tributaria’s Renta 2025 manual gives the credit as the lower of the foreign tax actually paid and the Spanish average effective rate applied to that part of the tax base.

Stopping UK tax at source with HMRC’s Spain form

The steps below follow the HMRC and Agencia Tributaria pages in order.

1. Tell HMRC you are leaving. If you do not usually file Self Assessment, use form P85; if you do, the residence section of your return. HMRC says this helps make sure you pay the right tax on a pension received abroad.
2. Get the Spanish residence certificate. HMRC’s form asks for a certificate titled Residencia Fiscal en España Convenio from the Agencia Tributaria. You request it in the Sede electrónica (the online tax office) under Todas las gestiones, Certificados, Censales, signing in with Cl@ve, a digital certificate or an electronic DNI, or at the tax office for your address with Modelo 01. If you do not meet the requirements, the system issues a refusal and lets you add documents. The tax residence certificate guide covers the Spanish request in detail.
3. Fill in the claim form. The GOV.UK page calls it Form Spain-Individual; the PDF calls it DT-Spain Individual. It is for residents of Spain receiving UK pensions, purchased annuities, interest or royalties, and covers relief at source and repayment. Part C1 is the State Pension, Part C2 other pensions and annuities, Part D lump sums.
4. Send it. HMRC’s general guide says to send the form to the tax authority where you are resident, which confirms your eligibility and either forwards it or returns it to you. The Spain form itself says to attach the certificate and send both to HMRC, Pay As You Earn and Self Assessment, BX9 1AS. Plan on the form’s own instruction: it is written for Spain, and the certificate does the confirming.
5. Wait for the PAYE adjustment. For a pension under PAYE, HMRC’s notes say the adjustment goes back to the latest of the date you became resident in Spain, the date payments began, and the earliest tax year still open for a repayment claim. Send your latest P60. HMRC deals with each application on its merits and expects changes to be reported without delay.

The official pages do not say how long HMRC takes, whether an online route exists, or how the result appears on your tax code. HMRC’s tax codes page defines code NT as “You’re not paying any tax on this income” but does not say a Spanish resident receives it.

A government pension stays taxed in the UK. British citizens who are not UK resident still get a Personal Allowance, claimed after each tax year with UK income on form R43. The same page says you do not need to report income to HMRC if you have already claimed relief under a treaty.

Declaring the pension on your Spanish return

The Agencia Tributaria treats foreign pensions as rendimientos del trabajo (work income), ignores exempt income when deciding whether you must file, and says the filing threshold is lower for a foreign pension because the payer withholds nothing. That page gives no figure.

The Renta 2025 manual (dated May 20, 2026) sets the general limit for work income at 22,000 euros a year, but 15,876 euros when the payer is not obliged to withhold, and says that lower limit applies to a resident whose only income is a foreign pension. The UK leaflet still prints 14,000 euros, but as a 2019 example.

Two more points from the same pages:

• Government pensions exempt in Spain still count toward the rate on your other income if you must file for that income.
• Modelo 720, the foreign assets return, is filed from January 1 to March 31 when a category tops 50,000 euros. The Agencia Tributaria’s FAQ says a foreign pension plan is not reported until it starts paying, unless the plan allows a surrender like a life policy; once a covered event occurs, you report your rights in it.

Other UK income and assets are in the guide to declaring UK income in Spain; the filing process is in the Spanish income tax return guide.

Lump sums and transfers: where the official pages stop

On the UK side, you can usually take up to 25 percent of a pension as a tax-free lump sum, to a maximum of £268,275; any part above your allowance is taxed, and unauthorised payments face up to 55 percent. HMRC’s Lump Sum Allowance guidance says the allowance may be higher with a protected allowance, and that a trivial commutation lump sum needs some allowance left but does not reduce it.

On the Spanish side, the official pages do not say how Spain taxes a UK tax-free lump sum, a drawdown lump sum or the year of receipt. The treaty and its protocol contain no lump sum rule. The Renta 2025 manual describes Spanish plans only: plan benefits are work income taxed on the full amount, lump sums from private schemes received since January 1, 2007 get no general reduction, a transitional 40 percent reduction covers contributions made up to December 31, 2006, and the 30 percent reduction is for public scheme lump sums. Binding replies of the Dirección General de Tributos may address UK pensions, but none could be read for this article. Get a written opinion before taking a lump sum as a Spanish resident.

HMRC repays UK tax on a trivial commutation payment if you were resident in Spain when it was paid (Part D, with parts 2 and 3 of the P45), and on a State Pension deferral lump sum through Parts C1 and D.

On transfers, GOV.UK’s pension transfer guide says a transfer to an overseas scheme that is not a QROPS (qualifying recognised overseas pension scheme) costs at least 40 percent tax. A transfer to a QROPS may cost 25 percent, but not if you live in the country where the QROPS is based and stay within your overseas transfer allowance. No Spanish official page on QROPS or on transfers to a Spanish scheme was found.

Your next step: file the treaty claim in your first Spanish year

As soon as you are resident in Spain for tax, request the Agencia Tributaria residence certificate, then send HMRC’s Spain form with it and your latest P60. Note the date you became resident: it limits how far back HMRC adjusts PAYE. When the Renta campaign for your first year of residence opens, compare your UK pensions against the 15,876 euro limit and file your Renta if needed.

A Briton with one workplace pension and the State Pension can usually do this alone. Get a cross-border tax adviser before taking a lump sum, transferring a pension, or if you hold a government pension and Spanish nationality. The State Pension and S1 guide covers payment and healthcare.

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