Tax for 2015

Old Jan 7th 2015, 11:25 pm
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Default Tax for 2015

Pardon my ignorance, but I am a bit confused by the Blevins Franks article in the EWN this week on tax changes for 2015.
Apparently tax is lowered for all taxpayers, more so for those on low and medium incomes.
Then it states that the tax exempt threshold has DECREASED from 17,700 euros to 12,450 euros.
How is that lowering income tax?
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Old Jan 8th 2015, 4:14 am
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Default Re: Tax for 2015

You are talking about the basic rate of tax, which has had the band decreased from the first 17700 to 12450 but the rate has been reduced.

That has nothing to do with the exemption from paying tax.

The basic allowances have been changed significantly and, as yet, it is not entirely clear what they are.

They have changed the old general allowance which varied from about 4k to 2.5k depending on your income. It now goes away completely if your income exceeds a certain amount, but there now seems to be an additional allowance of 2K but it isn't yet clear who can claim this.

Until the PADRE program appears in early April it is not easy to work out the new figures. Apparently, most people will see a decrease in tax, but bear in mind that due to the better exchange rates in 2014 most people's income will have increased in Euros which could easily outweigh the reductions.

Also, this year, UK government pensions will have to be declared in the Spanish tax declaration which will, in many cases, incur a further tax bill.
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Old Jan 8th 2015, 6:53 am
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Smile Re: Tax for 2015

Originally Posted by Fred James
You are talking about the basic rate of tax, which has had the band decreased from the first 17700 to 12450 but the rate has been reduced.

That has nothing to do with the exemption from paying tax.

The basic allowances have been changed significantly and, as yet, it is not entirely clear what they are.

They have changed the old general allowance which varied from about 4k to 2.5k depending on your income. It now goes away completely if your income exceeds a certain amount, but there now seems to be an additional allowance of 2K but it isn't yet clear who can claim this.

Until the PADRE program appears in early April it is not easy to work out the new figures. Apparently, most people will see a decrease in tax, but bear in mind that due to the better exchange rates in 2014 most people's income will have increased in Euros which could easily outweigh the reductions.

Also, this year, UK government pensions will have to be declared in the Spanish tax declaration which will, in many cases, incur a further tax bill.
I did a dry run yesterday and my marginal tax rate would appear to be about 3.5% based on adding up all the State Pension payments that appeared in my account 01/01/14 - 31/12/14. If I apply this to my Government pension I will definitly pay tax on my GP in Spain having already paid higher rate tax in UK. This seems to me to be contrary to the spirit of the DTT since there seems to be no mechanism to offset UK tax paid against spanish tax liability!

One thing leaves me confused. I am reporting my earnings for 2014 in 2015 and the changes to DTT are only being confirmed sometime in 2015 so shouldn't this come in for my return in 2016 of 2015 income?
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Old Jan 8th 2015, 6:59 am
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Default Re: Tax for 2015

If one arrives in Spain in March 2015 having wiped the slate clean both in France and the UK when please does the first declaration have to be made for tax and equally the payment date in Spain.

thanks once more
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Old Jan 8th 2015, 8:09 am
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Default Re: Tax for 2015

Originally Posted by EsuriJohn
One thing leaves me confused. I am reporting my earnings for 2014 in 2015 and the changes to DTT are only being confirmed sometime in 2015 so shouldn't this come in for my return in 2016 of 2015 income?
It's always confusing as Spanish taxes are paid in arrears.

The effects of the new Tax Treaty have been confirmed and come into effect on Jan 1st 2015 so they apply for the tax year which will have to be declared next year.

The thread refers to tax in 2015. That in itself is confusing as it could apply to tax due in 2015 on 2014 income or tax due on income in 2015 due to be paid in 2016.
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Old Jan 8th 2015, 7:05 pm
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Default Re: Tax for 2015

France is also in arrears. Thus to 31/12/2014 in theory you submit in May 2015 and pay in instalments to October 2015. But of course they have already taken a % based upon your tax for the previous year.

So I am presuming arrive in February then resident within three months and tax declaration based upon income (converted from £) to 31/12/2015 declared early in 2016? Then paid when? As a broad brush approach thought to allocate an estimate of taxation due on a monthly basis into our savings account in the bank? Is that intelligent thinking when it comes to the Spanish tax guys?

Of course with the strength of the £ one's euro income increases. Again (and sorry) in France the Banque de France used to issue a £/euro rate to be applied against all £ income. However some folks used a rate when the funds came into their hands.

Finally Fred and sorry to take up some more of your time. We have house investments in the UK. We have had due to obsolescence replace the boiler + the bathroom in one house. Can I set this against rental income please?
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