jessi

Hiya all

Right my parents live in spain & have done for 4 years now. A neighbour of theirs has seen in one of the local paper an article about ANNUAL RESIDENT TAX. They are unsure if they have to pay it or not. I have looked on the internet & on this site but I am still unsure.

They have lived in spain 4 years. They have a house in the UK that they use about 3 times a year when visiting. It is not rented out at all. They retired to spain but are not as of yet at pension age for about another 2 years so they recieve no money from that yet. They do not work at all & live off thier savings.

We too are moving to spain in 2 weeks, we are working over there & are totally selling up in the uk but are renting for 6 months first, so I would like to know what applies to us also.

Any info would be great so I can tell them exactly what they need to do if it does apply to them. Hope someone can help.

Thanks x

jessi

Anyone??

Fred James

If they live in Spain for more than 183 days in a calendar year they will be classed as tax resident in Spain. If so then they should be declaring their income and paying Spanish income tax on their world wide income.

If they are "living off their savings" then presumably they have the money invested and paying interest, so that income will be liable for tax in Spain.

You get personal allowances against tax in Spain just as you do in the UK but even if that means that no tax is payable because your income is low, you may still be obliged to fill in an annual tax declaration.

jessi

Hiya
No thats like income tax in the UK . I am talking about resident tax or wealth tax. Not tax on the money you earn or on interest. Obviously that has to be declared. This is something different. Any one know. I noticed a thread on it today but I could do with a specific answer to my question as it was all abit confusing.

bil

Time for professional advice. There are specific investments you can have which are legal, but protect your investment from wealth tax.

Beachcomber

Apart from the fact that wealth tax has been abolished from this year, residents have generous allowances making many of them not liable for this tax.

The only other annual government tax is income tax which you have already been told about.

Hillybilly

"Technically" they'd have to declare their worldwide assets which would include their UK home which may push them over the threshold...for this year's declaration at least.

jessi

Hiya

Right yes you know what I mean then. I did read somewhere that it had been abolished but then I read it had not that's why I am confused & if not I was unsure who it applied to. I was reading alot about non residence paying the wealth tax due to most letting thier propertys out as holiday homes. Is that a deffinate on the abolishment then? Where did you find the info about it?

Many thanks
Jess

jessi

Hiya Hillbilly

What do you mean by thier assets? Sorry I have no idea on this at all. Do you mean the value of thier properties?
If so can you explain another reply that the wealth tax has been abolised this year is that correct?

Cheers Jess

Hillybilly

I'm not the tax expert on here! Have a look in the free beer thread at the top.
As tax residents in Spain, they are liable for wealth tax and have been ever since they became tax residents here. They are liable to pay wealth tax on all their worldwide assets ie all property etc. They should have been making an annual self assessment tax return every year since living here as tax residents. The return is made to Hacienda for the tax year just gone from 01 May until end June. ie. right now they should be making their return for the tax year 2007. As said by others, there is a generous threshold for residents on their main property so many people have no wealth tax to pay (it is recommended to make a nil declaration even if you know you have no tax to pay)...but, as I said above, with your parents also owning a UK home and this being part of their worldwide assets, it may push them over the threshold. All depends on the values of their homes!
Wealth tax has just been abolished (there is a previous thread on this) ie for this tax year, 2008, so no wealth tax to be paid NEXT year...although I don't think full details are yet known.

jessi

Right that sounds just what I was after, will they have to go to the hacienda & declare the last 4 years? Any idea what the limit is? Sorry to appear dumb
Thanks alot for the info
Jess x

Hillybilly

Have a look at http://www.spanish-taxes.co.uk/servi...sh-wealth-tax/
Re the last 4 years, sorry, don't know the answer, but I'm sure Fred will!

Beachcomber

You are confusing too many things here.

Wealth tax has nothing to do with non-residents letting out their property. Non-residents pay notional income tax on their own use of the property. If they let the property they have to declare this separately.

Wealth tax is being abolished, income tax whether for residents or non-residents is not.

The announcement about wealth tax being abolished can be found here:

http://www.minhac.es/Portal/Prensa/E...+economico.htm

jessi

Yes I know I am just going by what I have read. I am confused as I have read things that totally contradict what the other is saying. Income tax yes I know about that its just the wealth tax I wanted to know about.

I just thought I would ask here before reading anymore.

Cheers for your help
Jess

jessi

Thanks you have been a great help its much appreciated.
Hope the weather is nice warm over there
Jess x