celestine

Can anyone shed any light on this please. When is it due? Roughly how much is it? Should we have the receipt for the last years payment from the agent?

In addition, we have moved here on a forces pension provided to my husband thus taken early retirement. We have no other income and this is a non taxable income. Do we still have to register at a tax office in Spain? Are there any benefits to becoming a resident? A very confused Expat...

EsuriJohn

Hi Celestine,

The situation with regard to H M Government Pensions has been dicussed on here many time if you do a search on that you will find lots of useful stuff.

You cannot export a Government pension from UK to Spain untaxed it has to be taxed at source in UK. It is then totally disregarded by the Hacienda in Spain (this is important as some local tax offices will try to add it to any other income to push you into a higher tax band do not accept this).

A State pension from UK can be exported tax free and paid directly into your Spanish account it is then taxable in Spain as income but the personal allowance just about covers this and you have no tax to pay.

The concensus is that you should fill out the 214 tax form every year even if you have no taxable income because you then get a declaration to that effect from the tax office. This is important down the line when you come to sell your house to prove that you are a. in the system and b. have paid all taxes due.

You are a tax resident in Spain if you spend more than 183 days in the tax year (Jan/Jan) in Spain.

Regards,

John. RE Rtd.

Hillybilly

IBI is a local tax imposed and calculated by your Ayuntamiento and is based on the valor catastral of your property so varies a great deal from property to property and place to place.
The issue/due date also varies from place to place...be aware you may not receive a bill in the post but the onus is on you to find out how much you owe, and when to pay.
The latest paid up IBI bill should have been produced by the seller of your property and would (normally) have been a document required by the Notary before a sale can proceed.

Fred James

[QUOTE=John & Kath;6523949] The concensus is that you should fill out the 214 tax form every year even if you have no taxable income because you then get a declaration to that effect from the tax office. This is important down the line when you come to sell your house to prove that you are a. in the system and b. have paid all taxes due. QUOTE]

Form 214 is for non residents.

If you are tax resident then you should make a declaration either via the Internet, via a financial advisor or at the tax office. You cannot just fill in a form.

If this results in no tax due you will still get on the system and you will not normally be expected to make another declaration if there is no tax due.

mikelincs

An Assesor will do your taxfor you, usually very reasonable costs, we paid about 40€ for the two of us, and all we had to do as take in the paperwork, then collect the completed forms and pay the tax at the bank.

EsuriJohn

[quote=Fred James;6524340] Sorry Fred you are correct 214 is for non-residents which is us this year and probably next but I thought there was a form is it 210?

Although if you can find a Gestoria as cheep as mikelincs then why do it yourself. I have searched online but it seems to be complicated to get registered to do it that way particularly if you do not speak Spanish.

snikpoh

Ours cost 70 euro for the two of us but this was for wealth tax as well as income tax.

Fred James

[QUOTE=John & Kath;6525440] Form 210 is for non residents who actually let their property (as opposed to the "imputed rental income" that goes on Form 214.

To do it yourself, you need to download the PADRE tax program from AEAT. You fill this in and then have 2 options. You can print it out (2 copies) and take it to your bank who will debit your account and send it off to AEAT.

The second option is to submit it online but for this you need a "digital certificate" on your PC. This certificate can be used as an electronic ID for many things in Spain - for instance to access your personal details and change them on certain sites such as the health service etc. It is actually quite simple to get one. Alternatively, if you have online banking you will probably be able to submit the form through their system as to access it in the first place you have to provide the bank with secure sign ons - that's the way I do it.

If your Spanish is not pretty good and, more important, if you do not understand the Spanish tax system, you would find it difficult to fill in the form. Once you had someone else do it for you, filling in the form the following year is much easier. Although the form has over 700 boxes for data on it most people only fill in one or two in addition to their personal data!

The simplest and cheapest way is to make an appointment with your local tax office and they will fill the form in online (they also use the same PADRE program). They are pretty helpful and don't require reams of supporting paperwork - they just accept what you tell them as far as income is concerned - it is your responsibility to give them the correct information or face the consequences if they decide to do a random tax inspection in the future.

The advantage of going to a gestor/financial advisor is that he will know of all the special deductions that you may not be aware of such as special arrangements for personal pensions, deductions for investment in your house and mortgage relief etc. The prices that others have quoted, I suspect are for non resident's tax returns which are really simple. Resident's returns are more likely to cost you over 100€ each. The form can be up to 19 pages long for a really complicated tax scenario!

celestine

[QUOTE=Fred James;6525797] Thanks for your advice. My husband and I are below retirement age but were lucky enough to be able to purchase our property here with a very small mortgage. We live on his veterans pension from the royal airforce regiment which is tax free and paid from the UK. This is our only income and we have no savings currently. The pension is for life and index linked and although it is not alot it is enough to live on currently so neither of us work. As yet we are non residents and do not know if we will apply for residency or not. Do you have any further advice on this matter with regard to tax and residency. Or do you know where the best place is to seek further advice. We have 1 dependant child. Kind Regards

EsuriJohn

[quote=celestine;6525828] You dont have choices after a fixed time period you have to apply for your "Residencia Certificate" (90 days Fred says) and similarly you are tax resident after 183 days in Spain.

These are the things you need or will have to do.

Get an E106 from Newcastle to give you health cover whilst you settle in lasts about 2yrs then if you are not working in Spain and paying in to their system you will need private health cover.

Sign on the padron at the Town Hall. This is needed for all sorts of things such as putting children in school, signing on at the local clinic and other town hall provided funtions.

Get your Residencia Certificate.

Make sure your UK tax office (Cardiff?) are giving you the full UK allowances against your pension and anything else you are entitled to (some allowances are exportable to Spain not sure about child allowances or tax credits)

There will be others and I am sure Fred will add to the list but do read the free beer thread at the top of the index page it has all sorts of useful info.

Fred James

There are two distinct types of residency.

The first is physical residency and the law says that if you stay in Spain for more than 90 days then you are obliged to apply for a Certificate of Residency. This does not affect your Spanish tax residency status or your UK tax status - it is really a basic formality.

Tax residency is always determined by the country in which you spend the majority of your time. In Spain, and most other countries, if you spend more than 183 days in one calendar year then you become tax resident - that is a matter of fact, not a matter of choice. Just because you receive a UK government pension and have it taxed in the UK does not mean that you are not tax resident in Spain.

As your current income is taxed in the UK (and that is a major exception to the rule that you pay Spanish tax on your world wide income) that means that although you are liable to Spanish tax, you will not have to pay any. When your income increases at retirement (I assume you will get the UK state pension) that will become liable for tax in Spain, although again it is unlikely to generate a tax bill because the tax allowances will probably exceed the pension income.

If you are tax resident in Spain it is a sensible thing to make a tax declaration even if it will result in no tax being due - this gets you registered on the tax computer as a tax resident and will enable you to take advantage of the very generous allowances against Capital Gains Tax should you move house and also, ultimately get special allowances against Inheritance Tax.

It now seems that the tax office are happy to accept a zero declaration in the first year and not require you to continue submitting zero declarations in future. However there is a legal requirement to submit a tax return if the family income exceeds 10000 Euros, and in some cases even less. The full UK state pension will exceed 10000 euros next year or if the exchange rate improves only slightly so that means that most pensioner couples will be obliged to submit a declaration.

EsuriJohn

Celestine if you want to have a full state pension and you have retired early and moved out of UK you will have to make voluntary payments into the DWP system. These do not cost very much about £350 a year but if you pay this until retirement or until you have the required no of years contributions (this will vary depending on your age now) you get a full pension at 65.

Fred James

Before you do this rememeber that the rules have just changed and if you reach retirement age after April 2010 you only need 30 years contributions for a full pension. At the moment you need 44 years for a man and 5 years less for a woman.

Current voluntary contribution levels are £405 per year but this gives you a 2.5% increase in your State pension which is about 35% annual return on your investment!

celestine

Many thanks to all who have given advice on this matter particularly James and Fred.

celestine

so sorry I meant John and Fred James