A small question about income tax

[campo babe]

Can you tell me which amount to put on my tax return form for pension income. Is it the gross amount as per the P60 from the UK or the net amount received in the bank in Spain?

I am asking this because of the exchange rate. If you use the amount of the UK P60 it is obviously in pounds sterling and this has to be converted into euros. The exchange rate makes the difference between having to pay tax or not.

[masterob]

Campo babe, the current exchange rate gives you LESS Euros for Pounds Sterling. Am I missing something but isn´t that good news as far as your tax is concerned?

[El Cid]

You have to apply the official exchange rate for 2007 to your gross UK pension income from your P60

That figure is 1 Euro = 68.434 pence or £1 = 146.126195€

Sid

[campo babe]

Thank you.

[Superplonk]

"official exchange rate" ?

Could you please clarify. I recently inquired how to treat UK bank interest and Hacienda told me I need to convert each monthly payment at the rate pertaining on the day it was made.
Is there just one annual rate to be used for pensions?

[El Cid]

You can use whatever rate you like but it is up to you to justify it if challenged. All you enter on the tax declaration is a Euro amount.

Hacienda publish an "average" rate for the previous tax year and you can use that for pensions etc. That is the figure I quoted.

If you have highly variable monthly income combined with a wildly fluctuating exchange rate I would personally use whichever method is beneficial to me.

Sid