My initial financial report
May 19th 2015, 12:47 pm
#16
Joined: Jun 2006
Location: Granada Costa
Posts: 10,904
Re: My initial financial report
Most gestors do an invaluable job sorting out normal bureaucratic processes and interfacing with the authorities on your behalf.
The problem here was that the gestor was probably well capable of handling any normal tax problem that a Spaniard would ask him about, but once you get into "international" tax affairs their knowledge may well be limited. If you went to your accountant in the UK I doubt that he would understand Spanish IHT.
This is one area where a "foreign" gestor may be better able to sort it out as he faces these problems more often because he will have more "foreign" clients.
As for using a gestor for property purchase, it would depend on his experience. There are "Gestorias Inmobiliarias" who specialise in property sales and purchase. It's a question of finding one that does know the business and that is where things can get difficult.
The problem here was that the gestor was probably well capable of handling any normal tax problem that a Spaniard would ask him about, but once you get into "international" tax affairs their knowledge may well be limited. If you went to your accountant in the UK I doubt that he would understand Spanish IHT.
This is one area where a "foreign" gestor may be better able to sort it out as he faces these problems more often because he will have more "foreign" clients.
As for using a gestor for property purchase, it would depend on his experience. There are "Gestorias Inmobiliarias" who specialise in property sales and purchase. It's a question of finding one that does know the business and that is where things can get difficult.
May 19th 2015, 5:16 pm
#17
Dichotomus tinker
Joined: Aug 2013
Location: Ontario, Canada
Posts: 6,678
Re: My initial financial report
My story is I always wanted to live in Spain, so I built up a portfolio of properties in the north of England to fund a lifestyle in Spain, all very good.
Since 2012 with the form 720, mutual tax disclosure from UK to Spain, it has become a very different world from pre 2012.
Now I do have to disclose some personal details here (I have to or it is a pointless exercise)
I have 350,000 euros in two properties in Spain, a villa and an apartment,
I have 800,000 pounds worth of UK properties all paid up.
I have cash ammounts over the 50k limit.
Now I spoke to the well known firm and the findings of the initial consultation are that:-
My income which is around 30k from these properties would not be an issue tax wise if I was to go cards in with the Spanish tax system, ie I would be taxed at source in the UK of course but thAt would offset the extra tax to be paid in Spain and I would pay a little more maybe £1500 or so to the hacienda.
The big shocker is the wealth tax, my properties are all in my name as my wife and I are separate financially, estimated to be around €10,000 per annum.
I have older parents who are not short of money and I think although this will be a good exercise in finding out my position, I think the stringent inheritance taxes in Spain will ultimately stop me ever being fully tax resident in Spain.
Al
Before I begin, I am not familiar with the tax or residency laws in Spain or similar for the UK
OP, I don't know how old you are, what the future holds for you & yours, whether you'll inherit anything from your aged parents should you out live them & more importantly if you want to leave your own legacy.
Everyone is different - 'but what I know is'- that I/we started out with 'nowt', worked & slogged bloody hard, invested wisely, raised two kids, put the through Uni (job done) & at the end of the day (kids gone & sorted) we decided 'what's mine/ours is ours'
Yes, of course its great to have an income from rental properties [factor in the hassle & having to deal with whatever], even having other forms of investments or income - but at the end of the day, do you want to leave a load of cash to your relatives or the taxman?
Will your wealth out live you, or will you out live your wealth?
We decided to cash it all in, to cash, take the small tax hit on capital gains.
We looked at the numbers, took into account our pensions at age 65 & suddenly shocked that what we had in cash, that even if it wasn't invested, us taking a fair bit every single week & just blowing it - given our lifestyle, it would last us till we were 100 years old.
Food for thought from my armchair
Last edited by not2old; May 19th 2015 at 5:35 pm.
May 21st 2015, 6:46 pm
#18
Forum Regular
Thread Starter
Joined: Apr 2007
Location: Ribble valley/Los Pacos
Posts: 242
Re: My initial financial report
As an outsider looking in from Canada in our late 60's, me & my missus were in a similar situation as far as investments, income & having capital tied up.
Before I begin, I am not familiar with the tax or residency laws in Spain or similar for the UK
OP, I don't know how old you are, what the future holds for you & yours, whether you'll inherit anything from your aged parents should you out live them & more importantly if you want to leave your own legacy.
Everyone is different - 'but what I know is'- that I/we started out with 'nowt', worked & slogged bloody hard, invested wisely, raised two kids, put the through Uni (job done) & at the end of the day (kids gone & sorted) we decided 'what's mine/ours is ours'
Yes, of course its great to have an income from rental properties [factor in the hassle & having to deal with whatever], even having other forms of investments or income - but at the end of the day, do you want to leave a load of cash to your relatives or the taxman?
Will your wealth out live you, or will you out live your wealth?
We decided to cash it all in, to cash, take the small tax hit on capital gains.
We looked at the numbers, took into account our pensions at age 65 & suddenly shocked that what we had in cash, that even if it wasn't invested, us taking a fair bit every single week & just blowing it - given our lifestyle, it would last us till we were 100 years old.
Food for thought from my armchair
Before I begin, I am not familiar with the tax or residency laws in Spain or similar for the UK
OP, I don't know how old you are, what the future holds for you & yours, whether you'll inherit anything from your aged parents should you out live them & more importantly if you want to leave your own legacy.
Everyone is different - 'but what I know is'- that I/we started out with 'nowt', worked & slogged bloody hard, invested wisely, raised two kids, put the through Uni (job done) & at the end of the day (kids gone & sorted) we decided 'what's mine/ours is ours'
Yes, of course its great to have an income from rental properties [factor in the hassle & having to deal with whatever], even having other forms of investments or income - but at the end of the day, do you want to leave a load of cash to your relatives or the taxman?
Will your wealth out live you, or will you out live your wealth?
We decided to cash it all in, to cash, take the small tax hit on capital gains.
We looked at the numbers, took into account our pensions at age 65 & suddenly shocked that what we had in cash, that even if it wasn't invested, us taking a fair bit every single week & just blowing it - given our lifestyle, it would last us till we were 100 years old.
Food for thought from my armchair
Best wishes
Al
