A Question On Tax
#1
Forum Regular
Thread Starter
Joined: Jan 2016
Location: 6 Months Wales 6 Months Canary Islands
Posts: 51
A Question On Tax
Hi
so having done plenty of research on retiring to Spain we have found the perfect island and the town. I have made an appointment with blevin franks as they seem to be very good. I did meet with our UK financial adviser today and did ask him about paying tax in Spain his answer left me very puzzled.
I have 2 bonds set up and currently take an income every month. Our FA said they are classed as return of capital and not income. So as long as that is made clear on tax returns you will have no problems and won't pay any tax.
Surely that can't be right can it ??
If anyone is interested about Blevin Franks I will gladly pm you on how I get on
Thank you
so having done plenty of research on retiring to Spain we have found the perfect island and the town. I have made an appointment with blevin franks as they seem to be very good. I did meet with our UK financial adviser today and did ask him about paying tax in Spain his answer left me very puzzled.
I have 2 bonds set up and currently take an income every month. Our FA said they are classed as return of capital and not income. So as long as that is made clear on tax returns you will have no problems and won't pay any tax.
Surely that can't be right can it ??
If anyone is interested about Blevin Franks I will gladly pm you on how I get on
Thank you
#2
Re: A Question On Tax
I can't give you a definite answer, but the Spanish taxman seems very generous when it comes down to questions like this. For example, income from an annuity is discounted by about 75% on the basis that most of the income is a return of capital.
Depending on the structure of the bond, I think it is entirely possible that the income may be tax free. Blevins are pretty good on these issues.
Depending on the structure of the bond, I think it is entirely possible that the income may be tax free. Blevins are pretty good on these issues.
#3
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Joined: Jun 2005
Posts: 1,272
Re: A Question On Tax
Blevin Franks ARE very good at this sort of thing.
We have been with them for around 10yrs now and are highly satisfied re the amount of tax we don't pay
We have been with them for around 10yrs now and are highly satisfied re the amount of tax we don't pay
#6
Re: A Question On Tax
Hi
so having done plenty of research on retiring to Spain we have found the perfect island and the town. I have made an appointment with blevin franks as they seem to be very good. I did meet with our UK financial adviser today and did ask him about paying tax in Spain his answer left me very puzzled.
I have 2 bonds set up and currently take an income every month. Our FA said they are classed as return of capital and not income. So as long as that is made clear on tax returns you will have no problems and won't pay any tax.
Surely that can't be right can it ??
If anyone is interested about Blevin Franks I will gladly pm you on how I get on
Thank you
so having done plenty of research on retiring to Spain we have found the perfect island and the town. I have made an appointment with blevin franks as they seem to be very good. I did meet with our UK financial adviser today and did ask him about paying tax in Spain his answer left me very puzzled.
I have 2 bonds set up and currently take an income every month. Our FA said they are classed as return of capital and not income. So as long as that is made clear on tax returns you will have no problems and won't pay any tax.
Surely that can't be right can it ??
If anyone is interested about Blevin Franks I will gladly pm you on how I get on
Thank you
For these bonds to be treated favourably regarding tax, they need to ne held in a 'Spanish wrapper' - this is what I do and pay very little tax when I do take any money out.
It's certainly not as simple as saying you will pay zero tax because your drawing down on the capital - it all depends how much the bonds have increased.
#7
Banned
Joined: Feb 2011
Location: Mallorca
Posts: 19,367
Re: A Question On Tax
I've been reading about all these criminals who are avoiding paying their 'fair share' of [amongst the world's highest] taxes, so I've been attempting not only to pay the maximum tax, but trying to double my taxes. I wouldn't want to foolishly deny our fine government of what is rightfully theirs.
But hacienda won't accept it. In fact, they suggested I make an appointment with an accountant. I said I don't want to hire someone to help me unethically avoid tax, so they suggested a psychiatrist instead.
But hacienda won't accept it. In fact, they suggested I make an appointment with an accountant. I said I don't want to hire someone to help me unethically avoid tax, so they suggested a psychiatrist instead.
#8
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Joined: Feb 2008
Posts: 542
Re: A Question On Tax
To give any meaningful advice, we need to know more about the bonds. For them to be treated favourably by the Spanish tax authorities, they need to meet certain criteria. One of these is the domicile of the bond. For example, Ireland is OK. Some other domiciles are regarded by the Spanish as tax havens and so that is a problem.
One downside of these bonds is the high charges associated with them (both initial and ongoing). As you already have them you will be aware of this, but be wary if any FA advises you to buy any more, or add to the ones you already have.
If you need specific advice on the tax situation of these bonds, please supply more information on them.
One downside of these bonds is the high charges associated with them (both initial and ongoing). As you already have them you will be aware of this, but be wary if any FA advises you to buy any more, or add to the ones you already have.
If you need specific advice on the tax situation of these bonds, please supply more information on them.
#9
Forum Regular
Thread Starter
Joined: Jan 2016
Location: 6 Months Wales 6 Months Canary Islands
Posts: 51
Re: A Question On Tax
Thank you for all your replies as always very helpful on here and to the people have pm me about Blevin Franks I will give feedback when we see them.
Myself and my partner did meet with a Spanish Asesor Fiscal / Tax Advisor yesterday and he worked out that our tax bill on the bonds income of €15468 would be €1,675.
Myself and my partner did meet with a Spanish Asesor Fiscal / Tax Advisor yesterday and he worked out that our tax bill on the bonds income of €15468 would be €1,675.