Completing A Spanish Tax Return
 

Sorry we have been away for so long, no excuses but I need some help now from the experts on here; boot lick, boot lick, boot lick!

I have searched and better searched for an example of how to work out a Spanish Tax Return but, alas, with no luck.

This is how I think it goes, purely an example but with correct rates etc.

UK State Pension 7,500.00
Net UK Rental Income 4,000.00
Total Income 11,500.00
Earned Income Allowance (4,080-812) 3,268.00
Less 35% sliding scale reduction
Taxable Income 8,232.00

Tax Due @ 24.75% 2,037.42
Personal Tax Allowance (5,151 @ 24.75%) 1,274.87
Total Income Tax to Pay 762.55
Rental Income Tax Paid In UK 800.00
Balance -37.45



Interest on Savings Including ISA's 2,000.00

Tax Due @ 21% 420.00
Tax Paid (Deducted by banks in UK and Spain 24.00
Tax To Pay 396.00

Can anyone please confirm or not that the methodoligy is correct please?

Steve

Re: Completing A Spanish Tax Return
 

You have been living your Spanish life so no need to apologise at all. I have no idea whether yours workings are correct or not but I am sure that others will be along to help.

Rosemary

Re: Completing A Spanish Tax Return
 

They look about right Steve.

Is all the income for one person or is it joint? I assume neither of you are over 65 so are not claiming the age allowance.

I will run it through the tax program later to make absolutely sure it's correct.

Re: Completing A Spanish Tax Return
 

Thank you Rosemary for your kind reply, you are quite right about living the good life; still no excuse for abandoning friends. We will try to do better.

Yes Fred this is for one person and neither one of us is over 65.

I used the same methodology for the actual figures and estimated that we would only have to pay the savings income tax. However when our Gestor put them through the computer he came up with around 1,000€ more. We see him again on Monday so I want to have the calculations on paper to hand.

Jill is the one with the UK State pension and a portion of the UK rental income. I just have an equal portion of the UK rental income. The savings are joint. When I calculated a joint return it came out almost 100€ more than 2 individual returns.

Re: Completing A Spanish Tax Return
 

Yes, a joint declaration when you both have similar incomes is usually more expensive.

If you PM me the exact details I will run it through the PADRE program and get back by PM before Monday.

Re: Completing A Spanish Tax Return
 

Thank you very much Fred, PM sent.

Re: Completing A Spanish Tax Return
 

Hi Steve, Could I query something in your calculations? I wondered why you have to pay UK income tax on your UK rental netting 4k? Would have thought the UK 10k tax threshold would count? Or does it all go a bit squiffy because of the Spanish side of things? Id be interested to hear why, not because Im nosey or anything. Im just one of those nerdy types who likes nerdy facts. :D

Re: Completing A Spanish Tax Return
 

You are quite right, if you have some UK rental income as your only source of UK income and that net income is below the personal allowance in Uk you would have no Income tax to pay in UK. It would however have to be declared in Spain as part of your worldwide income.

My wife and I both have occupational pensions taxable only in UK and therefore use up our UK personal allowance.

Re: Completing A Spanish Tax Return
 

Cheers for that. Much appreciated.:)

Re: Completing A Spanish Tax Return
 

Sorry to be a bit late with this, I've not got to checking the forum regularly and am catching up(will try and do better in the future)...but in preparation for doing our tax returns in the future, am I right in thinking that on a shared income of approx €16000 that we will deduct 2652 income allowance.
Also using a joint PA (as my husbands pension is really small until he gets his state pension) 5151+3400=8551
If we use your formula (which is really easy to understand)for income and savings and these tax allowances should we be able to do our own tax returns?

Re: Completing A Spanish Tax Return
 

Yes, that's about right, but savings income is different to earned income and taxed separately and at different rates. Also, your income allowance may be greater if you don't include the savings.

You can only do your tax returns using the PADRE program (downloaded from the tax office) and that does it all for you. You just enter the income amounts in the right boxes and it does the rest. It also tells you if you would be better off declaring separately rather than jointly.

Probably the most time consuming bit is entering all your personal details, bank details, addresses etc. The tax bit takes a couple of minutes!

It's a much better option, for simple incomes, that paying a gestor to do it for €200!

Re: Completing A Spanish Tax Return
 

Our Gestor only charges 90€ for both our tax returns which are submitted separately.

Re: Completing A Spanish Tax Return
 

Mine used to charge 50 euros for the both of us and this has not changed now that it is only mine to complete.

Rosemary

Re: Completing A Spanish Tax Return
 

I would say €50 is a fair price, but I do know of a number of people down here who have been charged up to €200.

The problem is that, when you get the completed forms back, they look so complicated, with loads of numbers on them, that you think it must have taken ages to work all that out.

The reality is, that apart from filling in your personal data, there are usually only two boxes that have to be completed - all the rest is instantly generated by the program. It takes me about 5 minutes to do mine.

Re: Completing A Spanish Tax Return
 

Thank you Fred, we won't be completing our tax returns until 2015 so we will make a note of the calculations used. My figures did not include interest from savings and I can see from Steves example that the savings are taxed differently. Of course the personal allowances and rates of taxation could change in the meantime, but like you say we can use the PADRE, which I didn't know we could. We thought it was only accessible by Gestors/accountants for example. If I could ask regarding the PADRE, could we for instance do a practice tax return(sad I know) using the system without actually submitting it? Just so we can get a feel for it.