How do annuities pay?

Q.- 
I am a tax resident in Spain. When I was 40 years old and working in England I purchased an annuity to mature when I was 55 years old, when I retired to Spain.

After reading the section on taxing annuities on the Tax Agency website, I have been declaring 28% of this annuity. Is this correct? The Tax Agency say that I should declare the full amount.

After reading your EWN column I now know that I should not have added it to my NHS pension but asked my gestoria to declare it on the investment part of the tax form. Is this correct?

M.B. (e-mail)

A.- Yes, it is correct that payments from an annuity are declared in the separate section of your tax form for investment or capital gains income, called in Spanish Ahorros or savings. And, yes, you declare the full amount of the payments.

Then you calculate the reduction based on your age when you began receiving payments. And, yes, you will be taxed on 28% of the income.  If your gestoria was unaware of this, perhaps you should find a  Spanish tax consultant to do it.

Send your questions for David Searl through lawyers Ubeda-Retana and Associates in Fuengirola at Ask@lawtaxspain.com, or call 952 667 090