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Wrong advice perhaps ??

Wrong advice perhaps ??

Old May 15th 2012, 10:56 pm
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Default Wrong advice perhaps ??

A friend has been advised by an estate agent that as he is a UK pensioner and is below the tax threshold (although never having submitted any tax returns in 8 years and does not need to) he would not need a lawyer when if ever he sells his apartment. Also he would not, in the event of selling, have to pay any tax on the proceeds of the sale.

Somewhere in the back of my mind I seem to think that as he is not a tax resident this advice may not be quite true.

Any advice on this?
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Old May 15th 2012, 11:06 pm
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Default Re: Wrong advice perhaps ??

Even though he may be below the tax threshold he should still have been sending in nil tax returns. I suspect that he will have to pay tax on the proceeds as your world assets are taxable. Also never ever believe an estate agent that says you do not need a lawyer. Fred will give you the full details on this though so hopefully he will be along soon to tell you the way that it really is.

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Old May 15th 2012, 11:17 pm
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Default Re: Wrong advice perhaps ??

You can only claim the CGT exemptions if you are tax resident. If you have never submitted a tax declaration then it will be assumed that you are not tax resident and you will have to pay the 3% retention tax and still be liable for the rest if the 3% doesn't cover it.

I believe it is possible to get a certificate of tax residency from Hacienda but I don't know anyone who has done it - it's probably easier just to do a nil declaration. You can do it for free at the local tax office if you make an appointment.
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Old May 15th 2012, 11:37 pm
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Default Re: Wrong advice perhaps ??

Originally Posted by Michael74
A friend has been advised by an estate agent that as he is a UK pensioner and is below the tax threshold (although never having submitted any tax returns in 8 years and does not need to) he would not need a lawyer when if ever he sells his apartment. Also he would not, in the event of selling, have to pay any tax on the proceeds of the sale.

Somewhere in the back of my mind I seem to think that as he is not a tax resident this advice may not be quite true.

Any advice on this?

I'm not sure where you got this but it's wrong. Everyone should do a tax return even if it is a nil return.

There are so many advantages - no issue with selling property later, no issue with succession tax later etc. etc.


Surely he is a tax resident (by default) but is simply failing to submit the required forms. Therefore, as far as hacienda is concerned, he will be classed as non-(tax) resident.
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Old May 16th 2012, 12:13 am
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Default Re: Wrong advice perhaps ??

Rosemary, Fred & snikpoh, thanks for your replies. I was pretty sure he was getting bad advice as when I decided to put my house on the market I was advised by my lawyer to make out nil tax returns as I am below the tax threshold but still classed as a tax resident.
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Old May 16th 2012, 1:34 am
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Default Re: Wrong advice perhaps ??

when does the tax return for last year have to be in by. When we first came over 8 years ago we went to the tax office and explained our circumstances, government pension taxed in the UK. We were told that unless we had other earned income we didn't need to do a nil tax return. We picked our olives one year and the local Co-operativa did our tax return for the sum of 3€. From what I have just read perhaps we should submit a nil return if we are not too late. Fred, advice would be greatly received, Form numbers etc.
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Old May 16th 2012, 4:08 am
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Default Re: Wrong advice perhaps ??

Originally Posted by betis
when does the tax return for last year have to be in by. When we first came over 8 years ago we went to the tax office and explained our circumstances, government pension taxed in the UK. We were told that unless we had other earned income we didn't need to do a nil tax return. We picked our olives one year and the local Co-operativa did our tax return for the sum of 3€. From what I have just read perhaps we should submit a nil return if we are not too late. Fred, advice would be greatly received, Form numbers etc.
For residents, the tax return for January 2011 - December 2011 is due in by the end of June (so now).

For non-residents it is due at the end of the year (last December).
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Old May 16th 2012, 4:19 am
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Default Re: Wrong advice perhaps ??

Originally Posted by betis
when does the tax return for last year have to be in by. When we first came over 8 years ago we went to the tax office and explained our circumstances, government pension taxed in the UK. We were told that unless we had other earned income we didn't need to do a nil tax return. We picked our olives one year and the local Co-operativa did our tax return for the sum of 3€. From what I have just read perhaps we should submit a nil return if we are not too late. Fred, advice would be greatly received, Form numbers etc.
I was told exactly the same thing when I went to the Hacienda office in Velez-Malaga in 2008 to try to make a nil tax return.
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Old May 16th 2012, 5:12 am
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Default Re: Wrong advice perhaps ??

Originally Posted by Lynn R
I was told exactly the same thing when I went to the Hacienda office in Velez-Malaga in 2008 to try to make a nil tax return.
Yes that often is their attitude.

If you stop and think about it, it is a complete waste of everyone's time to submit a zero declaration - BUT - the reason why you WANT to do it is so that you are correctly classified as being a fiscal resident.

The tax office (and the local gestors) spend 99% of their time with Spanish nationals - not expats. A Spanish national is effectively deemed to be fiscally resident unless he can prove otherwise.

Expats on the other hand NEED to prove that they are tax resident so that they can get the benefits of being tax resident.

The tax offices and gestors don't seem to grasp this simple point so you have to go to the trouble of forcing it on them by insisting on submitting a tax declaration.
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Old May 16th 2012, 5:47 am
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Default Re: Wrong advice perhaps ??

Originally Posted by Fred James
Yes that often is their attitude.

If you stop and think about it, it is a complete waste of everyone's time to submit a zero declaration - BUT - the reason why you WANT to do it is so that you are correctly classified as being a fiscal resident.

The tax office (and the local gestors) spend 99% of their time with Spanish nationals - not expats. A Spanish national is effectively deemed to be fiscally resident unless he can prove otherwise.

Expats on the other hand NEED to prove that they are tax resident so that they can get the benefits of being tax resident.

The tax offices and gestors don't seem to grasp this simple point so you have to go to the trouble of forcing it on them by insisting on submitting a tax declaration.
My gestor always tells me I dont need to, but I always insist. It costs naff all in the bigger scheme of things
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Old May 16th 2012, 5:50 am
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Default Re: Wrong advice perhaps ??

Can you submit a nil return yourself or do you need a gestor.
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Old May 16th 2012, 6:10 am
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Default Re: Wrong advice perhaps ??

Originally Posted by betis
Can you submit a nil return yourself or do you need a gestor.
Go to the local Hacienda and get the forms, you can do one yourself, although I pay €50 for the two of us which involves at the outside 2 visits to the gestor so its easier for me
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Old May 16th 2012, 9:25 am
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Default Re: Wrong advice perhaps ??

Originally Posted by Mitzyboy
Go to the local Hacienda and get the forms, you can do one yourself, although I pay €50 for the two of us which involves at the outside 2 visits to the gestor so its easier for me
It's not quite as simple as getting the forms - all 14 pages of them.

All tax returns are done on the computer using the PADRE program which you can download from the AEAT website. All gestors use this and if you visit the local tax office they will use the same program.

Although it produces reams of paper the actual entries that you need to put in are very simple.

When you have entered the data the program prints out all the forms in duplicate and you just take them to your bank to have the tax deducted from your account. In fact you can pay in two installments - 60% at the end of June and 40% at the end of November - you can also pay at your bank using your credit card.

I have done my own declarations for the past 10 years and it takes about 10 minutes once you know your way around the PADRE program.
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Old May 16th 2012, 10:00 am
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Default Re: Wrong advice perhaps ??

Originally Posted by Fred James
It's not quite as simple as getting the forms - all 14 pages of them.

All tax returns are done on the computer using the PADRE program which you can download from the AEAT website. All gestors use this and if you visit the local tax office they will use the same program.

Although it produces reams of paper the actual entries that you need to put in are very simple.

When you have entered the data the program prints out all the forms in duplicate and you just take them to your bank to have the tax deducted from your account. In fact you can pay in two installments - 60% at the end of June and 40% at the end of November - you can also pay at your bank using your credit card.

I have done my own declarations for the past 10 years and it takes about 10 minutes once you know your way around the PADRE program.
Of course .... its never that simple, but the poster asked if it is possible ... and it is. We went to the hacienda once and got em, but frankly its easier to get the hestor to do them. In reality there is very little that needs completing for us, and I could probably do one myself using a past one as a guide
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Old May 16th 2012, 11:13 pm
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Default Re: Wrong advice perhaps ??

Took the bull by the horns and went to the co-operativa this morning. Waited about an hour in the queue then convinced the man that we did really want to put in a nil return. Ten minutes later walked out with our copy and all for 17€. Thanks for all your help.
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