Car scrappage allowance
May 23rd 2015, 3:42 am
#1
BE Enthusiast
Thread Starter
Joined: Aug 2007
Location: Los Martinez
Posts: 858
Car scrappage allowance
I read today that the car scrappage allowance that was introduced to coerce people into buying a new car is under scrutiny.
Only in Spain could a government introduce a 2000€ scrappage payment if you bought a new car, and then the taxman decides that the payment is taxable!
Anyone who bought a new car under the scheme from 2013 are to get notices through the mail informing them that the scheme is subject to 15% capital gains tax
What it didn't make clear is whether the CGT is 15% of the 2000€ or 15% of the purchase price of the new car
Whichever way they want it, there are going to be an awful lot of upset people about!
Only in Spain could a government introduce a 2000€ scrappage payment if you bought a new car, and then the taxman decides that the payment is taxable!
Anyone who bought a new car under the scheme from 2013 are to get notices through the mail informing them that the scheme is subject to 15% capital gains tax
What it didn't make clear is whether the CGT is 15% of the 2000€ or 15% of the purchase price of the new car
Whichever way they want it, there are going to be an awful lot of upset people about!
May 23rd 2015, 6:17 am
#2
MODERATOR
Joined: Mar 2007
Location: Costa Valencia
Posts: 14,800
Re: Car scrappage allowance
When I bought my new car the dealer bought my old car from me rather than use the government scheme so that I would not have to put it on my tax form. He said that I would have had to have paid 200€ so it is only on the reduction not on the total price of the car.
Also the government contribution has gone from 1000 to 750 recently.
Rosemary
Also the government contribution has gone from 1000 to 750 recently.
Rosemary
May 23rd 2015, 6:56 am
#3
Joined: Jun 2006
Location: Granada Costa
Posts: 10,904
Re: Car scrappage allowance
It applies to the amount you received from the Government rather than the total allowance. Last year that was €1000.
It is classed as a gain, but as it was a "same year" gain it is taxed as income at the normal tax rates - ie. 24.5% if you are on the lowest band. You enter it in a special box on the tax return.
So, basically they only give you €750.
It is classed as a gain, but as it was a "same year" gain it is taxed as income at the normal tax rates - ie. 24.5% if you are on the lowest band. You enter it in a special box on the tax return.
So, basically they only give you €750.
Last edited by Fred James; May 23rd 2015 at 6:59 am.
