Spanish Tax
Apr 18th 2010 | 9:47 pm
#1
Thread Starter
Just Joined
Joined: Oct 2004
Posts: 14
Spanish Tax
I am slightly confused regarding our tax situation.
My wife and I are now residents, we understand that we should submit a tax return even if it is a zero rated. The confusion is this, I recently asked a local Abogado if I should submit a return. I was told that as we did not work, earn an income, and we live off the savings from a property sale, pay tax at source, we do not receive a pension, then do not need to submit a return.
What I would like to know is this ------
I am 59 my wife is 60.
She is pension age in the UK, does that mean she is a pensioner in Spain and does she need to submit a tax return.
We sold a property in the UK and we live off the interest paid on those savings. Tax is deducted at source.
We don't earn any money in Spain or work in Spain.
Do we need to submit a return or is it just me needs to submit one.
Any advise would be much appreciated
My wife and I are now residents, we understand that we should submit a tax return even if it is a zero rated. The confusion is this, I recently asked a local Abogado if I should submit a return. I was told that as we did not work, earn an income, and we live off the savings from a property sale, pay tax at source, we do not receive a pension, then do not need to submit a return.
What I would like to know is this ------
I am 59 my wife is 60.
She is pension age in the UK, does that mean she is a pensioner in Spain and does she need to submit a tax return.
We sold a property in the UK and we live off the interest paid on those savings. Tax is deducted at source.
We don't earn any money in Spain or work in Spain.
Do we need to submit a return or is it just me needs to submit one.
Any advise would be much appreciated
Apr 18th 2010 | 11:15 pm
#2
Retired and loving it!
Joined: Sep 2007
Posts: 5,210
From: Ontinyent - Valencia region (campo)
Re: Spanish Tax
I am slightly confused regarding our tax situation.
My wife and I are now residents, we understand that we should submit a tax return even if it is a zero rated. The confusion is this, I recently asked a local Abogado if I should submit a return. I was told that as we did not work, earn an income, and we live off the savings from a property sale, pay tax at source, we do not receive a pension, then do not need to submit a return.
What I would like to know is this ------
I am 59 my wife is 60.
She is pension age in the UK, does that mean she is a pensioner in Spain and does she need to submit a tax return.
We sold a property in the UK and we live off the interest paid on those savings. Tax is deducted at source.
We don't earn any money in Spain or work in Spain.
Do we need to submit a return or is it just me needs to submit one.
Any advise would be much appreciated
My wife and I are now residents, we understand that we should submit a tax return even if it is a zero rated. The confusion is this, I recently asked a local Abogado if I should submit a return. I was told that as we did not work, earn an income, and we live off the savings from a property sale, pay tax at source, we do not receive a pension, then do not need to submit a return.
What I would like to know is this ------
I am 59 my wife is 60.
She is pension age in the UK, does that mean she is a pensioner in Spain and does she need to submit a tax return.
We sold a property in the UK and we live off the interest paid on those savings. Tax is deducted at source.
We don't earn any money in Spain or work in Spain.
Do we need to submit a return or is it just me needs to submit one.
Any advise would be much appreciated
In my opinion ....
Submit a joint tax return declaring all income and tax paid in UK.
We are in a very similar position and even get a tax rebate!!!!
Apr 19th 2010 | 3:17 am
#3
BE Forum Addict
Joined: Nov 2003
Posts: 1,195
From: Cartama, Malaga
Re: Spanish Tax
you do realise that gestorias are not liable for any info they give out?
Re: Spanish Tax
Apr 19th 2010 | 8:26 am
#6
BE Forum Addict
Joined: Jul 2006
Posts: 1,389
From: up the mountain near Guadalest
Re: Spanish Tax
Yes you should submit a tax return even if it is nil rated
Apr 19th 2010 | 6:50 pm
#7
Joined: Jun 2006
Posts: 11,231
From: Granada Costa
Re: Spanish Tax
There are various rules about who must make a tax declaration but the key one in your case is the one that says that if you have joint savings income of more than €1600 then you must make a declaration.
You say your wife is of pensionable age in the UK but does she receive a UK state pension? If so that will also have to be declared.
You can submit either joint or separate returns – whichever results in the lowest tax figure.
At the moment tax on savings in Spain is 18%. This is probably less than the tax being withheld in the UK and you are allowed to offset the witheld tax against any Spanish tax due which will almost certainly result in a zero tax figure.
Taking into account the personal allowances in Spain you may well be due to pay less tax in Spain than you have already paid in the UK. Unfortunately you won't be able to claim the difference as a rebate. If the investments had been in Spain then Spanish tax would have been deducted and that could result in a rebate.
A final point about UK investments – if you have money in a tax free savings scheme such as an ISA, it is only free of UK tax and is liable for Spanish tax if you are tax resident in Spain. Strangely the same applies to winnings on the UK lottery or premium bonds!
You say your wife is of pensionable age in the UK but does she receive a UK state pension? If so that will also have to be declared.
You can submit either joint or separate returns – whichever results in the lowest tax figure.
At the moment tax on savings in Spain is 18%. This is probably less than the tax being withheld in the UK and you are allowed to offset the witheld tax against any Spanish tax due which will almost certainly result in a zero tax figure.
Taking into account the personal allowances in Spain you may well be due to pay less tax in Spain than you have already paid in the UK. Unfortunately you won't be able to claim the difference as a rebate. If the investments had been in Spain then Spanish tax would have been deducted and that could result in a rebate.
A final point about UK investments – if you have money in a tax free savings scheme such as an ISA, it is only free of UK tax and is liable for Spanish tax if you are tax resident in Spain. Strangely the same applies to winnings on the UK lottery or premium bonds!
Apr 20th 2010 | 6:29 am
#8
Thread Starter
Just Joined
Joined: Oct 2004
Posts: 14
Re: Spanish Tax
There are various rules about who must make a tax declaration but the key one in your case is the one that says that if you have joint savings income of more than €1600 then you must make a declaration.
You say your wife is of pensionable age in the UK but does she receive a UK state pension? If so that will also have to be declared.
You can submit either joint or separate returns – whichever results in the lowest tax figure.
At the moment tax on savings in Spain is 18%. This is probably less than the tax being withheld in the UK and you are allowed to offset the witheld tax against any Spanish tax due which will almost certainly result in a zero tax figure.
Taking into account the personal allowances in Spain you may well be due to pay less tax in Spain than you have already paid in the UK. Unfortunately you won't be able to claim the difference as a rebate. If the investments had been in Spain then Spanish tax would have been deducted and that could result in a rebate.
A final point about UK investments – if you have money in a tax free savings scheme such as an ISA, it is only free of UK tax and is liable for Spanish tax if you are tax resident in Spain. Strangely the same applies to winnings on the UK lottery or premium bonds!
You say your wife is of pensionable age in the UK but does she receive a UK state pension? If so that will also have to be declared.
You can submit either joint or separate returns – whichever results in the lowest tax figure.
At the moment tax on savings in Spain is 18%. This is probably less than the tax being withheld in the UK and you are allowed to offset the witheld tax against any Spanish tax due which will almost certainly result in a zero tax figure.
Taking into account the personal allowances in Spain you may well be due to pay less tax in Spain than you have already paid in the UK. Unfortunately you won't be able to claim the difference as a rebate. If the investments had been in Spain then Spanish tax would have been deducted and that could result in a rebate.
A final point about UK investments – if you have money in a tax free savings scheme such as an ISA, it is only free of UK tax and is liable for Spanish tax if you are tax resident in Spain. Strangely the same applies to winnings on the UK lottery or premium bonds!
Apr 21st 2010 | 2:45 am
#9
BE Forum Addict
Joined: Aug 2009
Posts: 3,669
From: Costa Blanca
Re: Spanish Tax
I think the problem is it is OK for native Spanish not to make a tax declaration and thus that advice is proffered to foreigners - but we have to prove we are fiscally resident (by declaring) to get any tax incentives or rebates to which we are entitled.
Everyone who is a resident and lives here should declare -
Even the tax official in the tax office told me I did not have to bother but I insisted, he thought I was mad but now I am fiscally resident. (Don't forget there is also a UK process to get out of the UK tax system, if applicable to you)
Everyone who is a resident and lives here should declare -
Even the tax official in the tax office told me I did not have to bother but I insisted, he thought I was mad but now I am fiscally resident. (Don't forget there is also a UK process to get out of the UK tax system, if applicable to you)
