Ronnyone

Is the castral value of a UK property the valuation price used for council tax bands.? I ask because I notice that accountant seems to have plucked a number out of thin air for model 100?

rbs_gb

I've got a link on my laptop which I'll find tomorrow for you. From memory for overseas properties it is 50% of the purchase price. The IBI is worked out at 1.1%, except if the valuation is more than ten years old, when it is charged at 2%. If you can find it, it is in the FAQs of the AEAT web site.

Ronnyone

So is it that simple that to get the UK valor castral I just halve the intial purchase price? And I take it the valor de construcción is just the rebuild cost quoted by my insurance policy?

rbs_gb

Usual caveat, I'm not an accountant, I just try and make sense of the information!

My go to starting link for most things hacienda is this https://sede.agenciatributaria.gob.e...inmuebles.html

The index on the left side should be highlighted for viviendas. In the right side click the first link for Calculo....https://sede.agenciatributaria.gob.e...-imputada.html

This is the general case for all inmuebles. In the case of an overseas property, 2b is the relevant clause as properties in the uk "carecen de valor catastral".

The sterling to euro part of the calculation should be the official rate as on the 31st December of the year you are declaring.

Hope that helps

bobd22

I would agree from reading clause 2b that is what would apply to ownership of UK property. It isn't on the Spanish land registry so the catasteral value will not get revalued and the percentage charged is 1.1%. The actual value will change with fluctuations in the exchange rate on 31 December.

rbs_gb

Yep, however, small change appears when you read the situation for non residents which appears to flip it slightly and any value that is more than ten years old is charged at 2%

https://sede.agenciatributaria.gob.e...so-propio.html

bobd22

Yes but that's due to Spanish property being on Spanish land registry system so the catasteral value is reviewed every so often, if the value hasn't been reviewed in 10 years then % changes from 1.1 to 2. UK property catasteral value won't change as it's based on price purchased for. That's how I read it, I'm no expert I would add🙂

Ronnyone

Thanks I don't think it has to ne exact for me as I rent the property all year so I don't need an imputed tax just need to be able to put a reasonable figure for the presumed castral and the rebuild cost. It doesn't effect my tax as that is based on the rent I get minus my deductions. The reason I am checking is because this year I had a new tenant and it is shockingly expensive in terms of what I had to pay. Approx £6,000 in repairs, redecoration, inventory, certificates, and £2,500 management fee. Consequently my deductions are huge compared to previous years and my accountant has warned me that they could go through my modelo checking everything - so I have to try and do it properly.

bobd22

Im sure I just give our Gestor income I get from our UK property rental? I declared purchase price on the Modelo 720 but for tax purposes was told just income as being taxed in UK. All my allowances for costs repairs are done on UK tax submission as they are taxing us? I presume if Spanish authorities wanted to check they could check with HMRC that income amount I declare to Spain matches income after allowances declared to HMRC. As previously said I'm no expert and to date I've not had any issues with Hacienda so won't rock the boat. I don't see really what allowances costs etc really have to do with Hacienda they need the income. It would obviously be different if submitting tax on the rental for Spain to tax? I don't work in Spain as retired maybe that affects ? I have read UK property rental CAN be liable to tax in Spain and UK with offset for tax paid in UK per double tax treaty..I asked about that and answer was taxed in UK Spain needs the income made declaring as that affects overall income for tax calculation. As for costs repairs yes they certainly total up but HMRC after never queried when I've put them in. Last year I had large bills for whole garden fence replacement due to storm. Garage roof replacement and decking replacement as rotten. On top of that agents costs insurances and other minor costs. I detail what I've paid and no problem no queries. Touch wood not had any issues to date from UK or Spain 🤞

Ronnyone

Not sure what you mean but you have to declare the UK property in uk self declaration with as you say deductions, rents, agency fees but you then have to do exactly the same in spain. That is why you need to have castral values etc as that part of the modelo relates to all properties irrespective of country or if it is tax there. I don't pay tax on my uk property in uk because it is joint owned with my ex and therefore we both get uk tax allowance but then we declare it again in spain where it gets added to our work incomes and therefore taxed.
I presume you do the same because you have to say if your income is pension, savings , rent or shares.

bobd22

As I said it may be different for you as your UK tax circumstances are different to mine. I pay UK tax anyway as I have crown pensions. However the way you describe it sounds like you are paying tax twice on UK rental although not actually paying UK tax because you have declared it for UK tax but it's under the threshold so no UK tax to pay. You are then declaring it as no UK tax paid to Spain and being taxed in Spain on it? As I said I asked that question and was told as I declare and pay tax on my UK rental all Spain needs is the actual income I have had and been taxed on by the UK. It then like my UK crown pension shows my overall income but is not taxed by Spain. I am not submitting the rental for tax but for information really. We have clearly received different advice.

bobd22

It may well be that I gave our Gestor the price we purchased our property for on the first tax return so he could calculate the Valor catasteral? That wouldn't change per year so would be on record the exchange rate would change each Dec but amount in £ wouldn't. Maybe that's why he doesn't ask for that every year

Ronnyone

Yes thats true your castral value wont change but I cant help feelimg you are wrong. If you recieve an income from uk from rent where does your accountant enter it on the modelo 100?. It should go into a special section- Bienes Inmueblas - where you declare any property you own here or abroad. You put your principal home and then any other property. If the other property is empty you pay an imputed tax if it is occupied then as soon as you fill that field you have to enter all the details of castral, rent, name of occupant deductions etc and then tax is applied. It makes no difference if you have already declared in uk.
That's my understanding but I cant see how else you can declare your uk income from rent. It cant go into savings which is where pretty much all passive incomes go?
As you say I am never taxed in uk so I dont know if when you say that you are already been taxed in uk that you dont need to fill out all the fields about the rent in spain. Maybe someone else has more information ?

bobd22

I presume he puts in income I've had into the box you mention. I honestly can't say as I pay him to do it for me. I give him all my income separate what income I've not paid UK tax on such as savings interest, premium bond winnings and UK state pension. I then list all income I have paid tax on the UK crown pension and rental Income. Majority of my income is crown pensions which I pay quite a bit of tax on. For the house my income is added to that and I pay the according amount of extra tax. State pension is dealt with by means of PAYE although is shown on my declaration for rental income. I just submit the information being as honest as I can and providing information I've been asked for. So far no issues but I am never sure and certainly no expert myself. Hopefully it continues issue free if anything crops up I will deal with it.

spainrico

Real Estate Income

According to the DTAs, any type of income received from a property at your disposal will be taxed at the State of Source, thus being where the property lies. This includes rental income and capital gains when selling.

For example, if you are a tax resident in Spain but rent out a property in the UK, you must pay UK tax to the HMRC.

If you are then obliged to present your annual income tax return in Spain because your income is over the thresholds, then you will be able to claim tax relief for the tax paid abroad and avoid double taxation.

https://expatsmagazine.org/double-ta...ents-spain-uk/