Modelo 720: Nil return?
 

Hi all,
This is our first tax year in Spain as residents, whilst sorting out all the forms to set up in Spanish tax world last year, our (then) adviser told us that we had to do our Modelo 720 declaration (Worldwide assets) between Jan and March this year, theres no doubt that's when it would be due, BUT we have no assets / savings / private pensions or property of any description outside of Spain, as we moved out here lock, stock and barrel and are 'transparent' with what we have in Spanish accounts in any case.
Nothing to declare in that case.
Simple question, do we need to do a 'Nil return' for our first tax year or simply take no action as regards the Modelo 720? Be pleased to know other persons thoughts.
Thanks!

Re: Modelo 720: Nil return?
 

Surely if you have no assets outside of Spain then you do not need to submit a 720. From what I have read you do not submit a nil return. You either have assets in the designated categories over the limit required to declare or you don't . If you don't then no requirement to submit anything.

Re: Modelo 720: Nil return?
 

You only submit a 720 if your assets outside of Spain are in excess of 50k euros in any asset class Or, if there are any changes to a previously submitted 720.

Re: Modelo 720: Nil return?
 

Thank you for the prompt replies, that's all really helpful and makes perfect sense.
I can't say 'Yes. I thought so', because I was honestly unsure!

Re: Modelo 720: Nil return?
 

I began submitting an annual nil return some years ago as I believed Fiscal Residence provide some benefits in the event of selling a property here in Spain. Seem to remember the last time I spoke to my Gestor she said any benefits there may once have been are no longer valid. Next year when it's due agin, will check this out and if there are no benefits, I won't bother.
Anyone know if what I was told is true?

Re: Modelo 720: Nil return?
 

I think you may be confusing the annual income tax declaration with the asset declaration.

You never submit a nil return for the asset declaration, but frequently do so for income tax. Once you have submitted your first income tax return you are definitely officially tax resident and entitled to any benefits that may arise from that. So long as your income is below the official minimum for declaration, there is no further requirement to declare.

If your nil return is a result of having a UK government pension, the rules have just changed and you will be required to submit a tax declaration as any income that is connected with the double taxation treaty must be declared even if it results in a nil declaration.

Re: Modelo 720: Nil return?
 

Yes, I was confusing the two Fred, thanks for the correction. Still, when I did mention income tax declaration to my Gestor, she said there were no advantages to being Fiscal Resident any more. Whether she was confused also I have no idea. As I said in my post when time comes around this year I will clarify things with her.
Thanks again.

Re: Modelo 720: Nil return?
 

She is not confused - she does not know what she is talking about!

There are significant advantages to being tax resident, particularly with regard to Capital Gains Tax and Inheritance Tax.

Re: Modelo 720: Nil return?
 

Threads like this worry me as some people seem to be trusting completely unqualified advisers with important issues. Which raises the question who exactly can be trusted to give accurate professional advice?
Especially as anybody can download AEAT's 'PADRE' program and call themselves a 'tax expert'.
Thoughts anyone?

Re: Modelo 720: Nil return?
 

I can't see why downloading the PADRE program would make you a tax expert - you still need to know which boxes to fill in.

Reading the 700 page tax manual that comes with it could be a step in the right direction.

Re: Modelo 720: Nil return?
 

Hi Fred, there is an article in this week's RTN which states that there are now no differences as regards liability for inheritance tax between tax and non-tax residents.
Of course I can't know the validity without so-called professional advice!

Re: Modelo 720: Nil return?
 

That's not entirely true.

Some regions give extra allowances based on long term residency in their region, some do not and only the basic state rules apply. The EU have declared that this is discrimination and that Spain must make these allowances available to both residents and non residents. Although the law has not yet (to my knowledge) been changed, many lawyers are encouraging people who have paid IHT in the last 4 years to reclaim some of the tax - that may be what you saw in RTN - there are loads of opportunist law firms jumping on the bandwagon!

What they fail to point out is that one of the major allowances against IHT involves the "habitual residence" of the deceased. This can be left to the surviving spouse or descendants with a 95% allowance exempt from tax so long as the property is retained for 10 years. This applies across Spain rather than just in some regions. This allowance is not available to non residents, because, by definition, their property cannot in any way be classed as their habitual residence.

Re: Modelo 720: Nil return?
 

You refer to residents and non-residents. Fiscal residency is in a different category surely?

Re: Modelo 720: Nil return?
 

No, the only residency that has any legal significance is fiscal residency.

If you are not declaring your taxes in Spain you are not a resident as far as the taxman is concerned.

Re: Modelo 720: Nil return?
 

Form 210 Notional rental income

I know this is probably the wrong place but I did not wish to start a new thread.
The tax I pay on my house in Oliva, that I do not rent out, has tripled in a year from c.euro50 to c.euro150e.
Has anyone else experienced such a large % increase and if so why?

Thanks

Re: Modelo 720: Nil return?
 

Has the cadastral value been updated? That's about the only way it can have changed - oh, and they might have changed the percentages you have to pay but that would be national news and I haven't heard anything.

Re: Modelo 720: Nil return?
 

I would get that checked out. Did you complete it yourself online? It is easy enough to do yourself. If someone else has done it for you it may be their charges that have increased.

Re: Modelo 720: Nil return?
 

Good point, is it that the TAX has increased or the amount you pay in total for someone else to do it for you?

Re: Modelo 720: Nil return?
 

It's the tax.

Re: Modelo 720: Nil return?
 

I do not do my own tax return in the UK let alone Spain. Life's to short!

Re: Modelo 720: Nil return?
 

I believe it did go up slightly in 2012 but mine increased about 6 Euro I believe next year it is due to go down slightly due to % used to calculate. Over 8 years 6 Euro is only change I have had.

I accept that tax can be difficult but believe me the online modelo 210 from this official site is both easy and straightforward. https://www2.agenciatributaria.gob.es/es13/h/ie32100b.html?idi=en
I use it because the first year of ownership our solicitor contacted us to submit the 210. I had already calculated it so knew what the tax would be, solicitor quoted a figure of 310 Eeuros the tax I calculated to be just under 60 Euros! As a precaution the following year I used this company who were excellent and calculated exactly the same amount as myself.
http://spanishtaxforms.co.uk

However as I say I now do it myself online it takes me around 20 mins and I just pay it when over.

Re: Modelo 720: Nil return?
 

You're probably right I should do it myself (perhaps next year). I'm just lazy and leave to my Lawyer. I know I could get it done cheaper but see it as a retainer and did receive some free advice from him on another matter.

Having looked at the form the Renta inmobiliaria (210 I) increased from e99.03 to e294.36. Both years were charged at 24.75% with both of us having to pay that amount each.
Do you know how the Renta sum is calculated? I am intrigued that something like this can triple in a year.

Re: Modelo 720: Nil return?
 

This explains the method of calculating tax due

The calculations use the rateable value (or valor catastral) as the base figure for the calculation. The percentage then to be applied is of 24% (24.75% in 2013) of a 2% of the rateable value (or 1.1% if this value was updated after 1994). In cases where the rateable value is not known, you can use half the purchase price as the base value for the calculations. In this case, the coefficient applied will be 1.1%

if confusing this is how I do it:

valor catastral is 22,000 euro so 1.1% of that = 242 and 24% of 242 = 58.08 euros to pay in tax (divided by number of owners if applicable).
not my exact figures but off the top of my head

Re: Modelo 720: Nil return?
 

I wonder if rather than using the valor catastral which depending on your property can be very low especially village houses which ours is. Your solicitor has started using the calculation of purchase price which of course may be much higher than valor catastral. Only other thing that could have changed would be the valor catastral has been updated? but it does seem quite a significant rise.

Re: Modelo 720: Nil return?
 

The valor Catastral is on your IBI BILL so is easy to find.

Re: Modelo 720: Nil return?
 

see post #16 - we seem to be rehashing old ideas.

If he has started calculating it differently, then a simple call will find out.

Re: Modelo 720: Nil return?
 

Yes agreed but it certainly seems to be a substantial increase

Re: Modelo 720: Nil return?
 

As bobd22 alluded to, isn't the notional rent calculation based on THE GREATER OF:

the price declared on the Escritura, or

the Valor Catastral, or

the value deemed by the tax office if the Escritura price is not accepted?

That could be why there has been an increase

Re: Modelo 720: Nil return?
 

NO the only debate is when the last Catastral update occurred.

Re: Modelo 720: Nil return?
 

Thanks for clarifying the situation, EsuriJohn. Think I need another solicitor

Re: Modelo 720: Nil return?
 

Having discussed the non resident tax issue i decided to complete my 2015 return to pay when over next ( I know not due until Dec but just to get it out of the way ). Having completed the form I have one issue. Last year the rate was 24.75% I believe this was being reduced for 2015 the form puts in 20% but when you come to print it out it shows an error. Does anyone know what rate i should enter in order to get the system to accept it? Has it reduced or is it still 24.75%.

Re: Modelo 720: Nil return?
 

The rates of tax for 2015 were 20% upto 11th July 2015 and 19.5% from the 12th, so the rate is around 19.76%.

In addition, the multiplier of the cadastral value is now based on the previous 10 years. So, if your cadastral value has been revised in the last 10 years, it's 1.1%, otherwise it's 2%. So anyone who cadastral value has not been revised since 2004 (so 10 years after the previous date) will now be paying 0.9% more

Re: Modelo 720: Nil return?
 

Thanks for that . I was aware of the cadastral valuation change to 10 years rather than 1994, luckily ours was done in 2007.

Re: Modelo 720: Nil return?
 

According to the Oliva town web site the cadastral was revised in 2014. I pay my IBI via DD and the only receipt I get is from the bank and I threw that away. I know my cadastral reference. Is it possible to get to the value from that reference via the SEDE(?) website as I tried and failed.
I still find it hard to believe the value has tripled just because of a revaluation. It's not the amount that bothers me, I just wish to know it's correct.
I have emailed my lawyer but am not expecting an answer anytime soon!

Re: Modelo 720: Nil return?
 

You can only acces the data at the Catastro with a digital certificate.

You should have received a detailed explanation of the change before it was implemented, as theoretically you can challenge the revised rating. It is possible to calculate your cadastral value from your IBI payment, as all the information is available on the ayuntamiento website.

The only other point I would make is that in respect of IBI, but not imputed income, then normally the change is phased in over an 8 year period. This means that your cadastral value for IBI increases each year by about 12% plus the annual increase, until it reaches the revised value.

On the Oliva website it's clear that the rustica values tripled. The rates for 2016 remain the same at 0.86% (urban) and 0.55% (rustica)

"In 2014, with the entry into force of the new communication of cadastral values, the value (= tax base) of the properties rustic nature tripled as a result of legislative changes incorporated in the register of rustic scattered all (= sorting out buildings) previously taxed as urban."

Re: Modelo 720: Nil return?
 

I too psy my IBI by direct debit but I still get the IBI bill which contains all the information including cadastral valuation and revision date. It may be that your actual bill is going to your solicitor who is not passing it on? There is an office where you can get a copy of the IBI bill, I used this as when we first bought the house there was confusion and it turned out our bill was for the wrong house. By attending this office I got it sorted out. I can't remember off the top of my head the office name but I will look it up and let you know. My payment for 2015 is actually 12 Euros less due to the change in the tax rate. The online form will only proceed when you enter the correct rate which for 2015 is 19.5%.

Re: Modelo 720: Nil return?
 

The office I went to was called Patronato De Recaudacion Provincial. They were very helpful and printed off a copy of the IBI bill there and then.