Algorfa1950

When you become tax resident, do you have to declare offshore bank account interest for income tax assessment?

Fred James

Yes, all income of any type from anywhere in the world has to be declared.

Algorfa1950

OK thanks.😁

Notdunroamin

Don't forget the Modelo 720 if you have worldwide assets which total <€50k

Algorfa1950

That's only after 12 months isn't it ?

1sexsmith

I think It is for the first year you are a resident. So you need to do it at the same time as your first tax declaration. So if you have only arrived after Jan 2024 you don't do either until this time next year when you submit your 2024 tax year.

Lynn R

If you waited until this time next year you would have missed the deadline for submission of the Modelo 720. The Modelo 720 for the 2024 tax year would need to be submitted between 1 January and 31 March 2025, and the income tax declaration between early April and the end of June (exact dates may vary by a day or two and are always announced at the start of the new tax year).

Modelo 720 March deadline – What do you need to do? (blevinsfranks.com)

Algorfa1950

Well we won't be arriving until end of June, so presumably won't have to do it until after that time next year? Correct?

By the way, can you just complete these forms yourself, or are they all in Spanish in which case I would need an accountant and what is the cost of that likely to be ?

Lynn R

If you arrive on or before 30 June, you will be tax resident in Spain for 2024 so would have to submit both returns in 2025. If you arrive on or after 1 July you will not be tax resident in Spain until the 2025 tax year so would not have to submit the returns until 2026.

Well of course the returns are in Spanish, would you really expect anything else? There is a facility to get an "English version" of the income tax return on the Agencia Tributaria website, but it doesn't translate very well and you suddenly find that some bits revert to Spanish. It is possible to complete the returns online yourself, but you need to have an understanding of the way the Spanish tax system works, and what various terms mean, to do it. As an alternative to paying an accountant or gestor, the Agencia Tributaria offers a free service whereby taxpayers can make an appointment at one of their offices between about mid May and end of June each year (exact dates announced at the same time deadlines for submission are publicised) and have a member of their staff complete the income tax return for them. We used this service for a few years before we felt confident enough to complete our own tax returns online, they were very helpful and you don't even need to take any supporting documentation, just give them the amounts (in euros) for the various categories such as incomes from work or pensions, savings income, etc. But they don't offer a similar service for the Modelo 720.

But our financial affairs are very simple, we have only pension income and some interest on savings. For anything more complicated it would really be sensible to use an accountant or gestor, and for the first return (if not using the Agencia Tributaria free service) I don't think anybody could do it themselves. If you get someone to do it once or twice then at least you have a model to follow in future years if you feel up to doing it yourself. I used a gestor once when I had sold a property and bought a new one in the same year, and wanted to make sure the Capital Gains part of the return was dealt with properly (above my pay grade!).

Joppa

Not necessarily. If Spain regards you as resident from the day you arrive, you will be tax resident for 2024 tax year (Jan to Dec).There are several criteria they use, apart from the number of days in Spain, such as the centre of economic activity, where your spouse and children are living etc. This is for tax declaration, which you submit between April and June in 2025 for 2024 tax year. Overseas assets declaration (Modelo 720) for 2024 has to be submitted between Jan and March 2025.

Certainly for the first Modelo 720 (overseas assets declaration) and tax declaration, you should entrust it to a gestor. For a couple, separate declarations are required and I pay around 90 euro each. Yes, it's all in Spanish. An accountant will probably charge double that. I pay slightly less for tax declarations, around 70 euro each.

Algorfa1950

That's really helpful. Our tax situation will be much the same as yours, only pensions and savings interest on a yearly basis, but if we sell our house within the first tax year, presumably we will have to declare the sum received for that, before we purchase another property, probably within the first 6 months which we intend to do, as we will be living with my daughter for the first few months until we find somewhere. Sounds like we might need a gestor for at least the first year or so!

Algorfa1950

I think my daughter uses a gestor for their accounts as they are self employed, so we may be just as well served using her gestor to do our Modelo 720 next yr for tax yr 2024/25.