Possible error on Modelo 100 tax return

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El Cid
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Re: Possible error on Modelo 100 tax return

Postby El Cid » Sun May 28, 2017 11:14 pm

The link you post covers the annuity situation. The only real question is whether the annuity actually qualifies for the tax relief. The important thing is how you acquire the annuity. If you bought it yourself as part of an insurance payout or even from your own funds it qualifies,

If it was arranged for you automatically as part of your pension payments it does not qualify.

The problem is that, although these annuities are available in Spain, for some reason gestors do not seem to be aware of them. That is one of the reasons why I prefer to do my tax declaration myself because I do not have to justify exactly what type of annuity I have (although as I purchased it personally from my pension fund it clearly qualifies.

You will never get a gestor to admit they are wrong, it would destroy their credibility.

A friend had a tax situation last year with regard to the new rules about UK Government pensions.The gestor did not allow for this so he told them exactly what to do. They still got it wrong to the tune of €6000 in his favour. He went to the tax office and they agreed with the calculation which was clearly wrong (it should have resulted in an additional tax bill of €2k)

That's why I have always done my own tax returns - they have the right to challenge what you say, but if you end up paying them a significant sum in tax, they are unlikely to challenge what you say.

Sid

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Re: Possible error on Modelo 100 tax return

Postby fyfin » Mon May 29, 2017 9:30 am

Well I'm shocked !! This morning I received an email from my gestor to apologise - in fact it was a complete turnaround. He has asked me to make an appointment with the lady who does the tax returns where they will resubmit them and arrange a refund. My last email showing the link seems to have activated them and they now agree that even different tax inspectors have different opinions.

Interestingly Sid, I felt slightly uncomfortable with the previous returns as one of the annuities had contributions from an employer and as such I thought it might not qualify, but the previous lady said if it has the word annuity she would enter it as such. I am now presented with another slight quandary, do I ask for this annuity (I have 4 altogether) to be considered as normal pension income and the other 3 as savings income (rentas vitalicas imediatas).

Or do I just let them lump the whole lot under the annuity heading as they are now suggesting.

I was all set to go in with all guns blazing today and now there's been a total surrender - still can't get over it, but it appears my insistence that I was right (at least in part) has made them look at the other returns they have done for other clients.

I think I'll have a brandy with my coffee this morning, and I know my wife will be pleased, because this all kicked off just as we went to Roquetas for a 4 day break, and the topic of conversation seemed to get around to Spanish taxation quite a lot! lol

Sid, as always I appreciate your input and I am seriously considering doing my own returns from now on, it was just laziness that I didn't in the first place.

Incidentally, I don't know what exchange rate they used as I can't reconcile the figures, although I think that the rate is arguable - I used €1.2234/£ and I know it is issued at the end of the year but I can't find the link for 2016 and I don't know where I found it now.
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El Cid
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Re: Possible error on Modelo 100 tax return

Postby El Cid » Mon May 29, 2017 10:42 am

I don't think it matters that the employer made contributions as the money paid in is yours. The key point is whether you made the decision to invest it in the annuity. If it was a company scheme which automatically converted into an annuity then I think that would be different. It's very difficult to get a definitive ruling. I would just go ahead and keep it the same as you have been doing. Any changes you make are more likely to trigger questions compared to leaving it the same.

I am not aware of an official source for the average exchange rate. The Bank of Spain issues an official rate for year end calculations such as for wealth tax or Form 720. I usually get it from the ECB figures or one of the FX companies. I have rounded off the figure in the FAQ to 1.22 which covers most of the published options.

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Re: Possible error on Modelo 100 tax return

Postby fyfin » Thu Apr 04, 2019 9:17 pm

UPDATE - Just had a letter from Hacienda informing me that they have been in touch with HMRC and it appears my return for year to 31.12.13 (presented in 2014) was incorrect. When I checked against the return I can see that they have added back all the reduction that was made re pension annuities.
I forgot to mention on here that the one purchased annuity, sometimes called immediate life annuity was accepted as such and the additional tax we paid was refunded in 2017.
However, this is much more serious because my only source of income was pension annuities so they have back charged the tax and possibly will get a fine as well. The fact that I was wrongly advised that all annuities were classed as renta vitalicas and taxed favourably will make no difference I'm sure. I expect 2015 and 2016 will follow. It was corrected in 2017 return
The main point is that they definitely collaborate with HMRC, so I suspect a lot more of this type of letter will be dropping into post boxes.
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Re: Possible error on Modelo 100 tax return

Postby Lavanda » Fri Apr 05, 2019 7:12 am

Go and talk to the tax people. If you can prove there was no intention to 'defraud' you will not be fined.

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Re: Possible error on Modelo 100 tax return

Postby fyfin » Wed May 08, 2019 2:43 pm

I've found out that in this area the tax office have been looking at returns by UK citizens made in 2014. I know of 3 people who have had demands for tax due to incorrect returns ( 2 by the same accountant I used). The other person used a different accountant and was told that their company had been made aware that letters had been sent out to many of their UK clients with tax demands. You get 15 days to refute the demand and provide evidence that it is incorrect, but in the letter they show the figures they have calculated in euros , from HMRC provided sterling figures.
So, there appears to be a deliberate targeting of UK taxpayers, as the same accountant said they do returns for other nationalities, none of whom received letters.
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Re: Possible error on Modelo 100 tax return

Postby elusive » Wed May 08, 2019 7:41 pm

I presume other countries have annunities aswell and its not just a uk thing?

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Re: Possible error on Modelo 100 tax return

Postby peteroldracer » Wed May 08, 2019 8:08 pm

It was explained to me that the only annuities that count for this special category are ones that have been bought with savings made using tax-paid mpney. An annuity bought with company contributions is not eligible. But then again if you surveyed 100 taxmen and 100 gestors how many different opinions would you get?
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Re: Possible error on Modelo 100 tax return

Postby fyfin » Thu May 09, 2019 11:54 am

petrolracer unfortunately that is exactly the same as UK and the Spanish tax authorities are liaising now with HMRC so I expect a few more will be disappointed if they start to investigate more UK taxpayers in Spain. There was certainly ambiguity and if you just carry on doing it the way you always have you may well get away with it but, like me, if you have someone who asks stupid questions at the local tax office then be prepared for the consequences.
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Re: Possible error on Modelo 100 tax return

Postby El Cid » Thu May 09, 2019 12:02 pm

The moral is don't go near the tax office. Most of them haven't got a clue about foreign pensions, especially UK government pensions. Find a good gestor who knows what to do or do it yourself - your computer won't ask you any potentially difficult questions!

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Re: Possible error on Modelo 100 tax return

Postby fyfin » Thu May 09, 2019 12:36 pm

Sid. Couldn't agree more. I was caught out but good advice for others
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Re: Possible error on Modelo 100 tax return

Postby Wicksey » Thu May 09, 2019 2:21 pm

I'm slightly confused over this question of annuities.

My OH receives a very small amount from an annuity that he took out as a free standing AVC (additional voluntary contribution). He paid it himself and it attracted tax relief which was added to the contributions (ie he paid 100 pounds pm by standing order but the insurance company got 125 with the tax relief added, as I understood it). We've always declared (via our gestoria) 28% of the total amount on the Spanish tax return which is the discounted amount relating to his age when he started receiving the pension.

I'm not sure if the full amount would bring us into the tax bracket but I'd like to know if this sounds correct as I cannot understand the difference between the annuities mentioned in the thread.

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Re: Possible error on Modelo 100 tax return

Postby Lavanda » Thu May 09, 2019 3:41 pm

The moral is don't go near the tax office. Most of them haven't got a clue about foreign pensions, especially UK government pensions.
Maybe. However, if you go armed with all the information and you tell them what to do the system works just fine.

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Re: Possible error on Modelo 100 tax return

Postby peteroldracer » Thu May 09, 2019 4:44 pm

Lavanda: if you can do that, why go there? Just do it yourself on line?
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Re: Possible error on Modelo 100 tax return

Postby fyfin » Thu May 09, 2019 5:00 pm

Wicksey you are not alone. My opinion is as mentioned by petrolracer. However as that's what you've always done then keep doing it. Watch out if someone new comes to the gestor's office and changes it without telling you. That's more or less what happened to me. I believe it has been a bit of a grey area for Hacienda in the past but since they seem to be liaising more with HMRC,
at least in our area, they seem to be examining these policies more carefully. Unfortunately I couldn't provide a contract between me and the provider in every case. One was a free standing avc but arranged via company advisor. But as I said I would have carried on as I was if it hadn't been for someone being stupid.
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Re: Possible error on Modelo 100 tax return

Postby Beachcomber » Thu May 09, 2019 5:02 pm

It may not have helped in this case but whenever I have a query I call the AEAT helpline and record the call so that I have evidence if there is a subsequent query.

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Re: Possible error on Modelo 100 tax return

Postby Lavanda » Thu May 09, 2019 5:23 pm

I would, Peter, but the digital signature thing defeats me utterly even though Sid helped me with it ages ago. Our Gestor does it perfectly each year and charges €40.00 for the two of us.

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Re: Possible error on Modelo 100 tax return

Postby Free at Last » Thu May 09, 2019 5:56 pm

You don't need a digital signature to complete your own tax return online, Lavanda, nor a PIN Cl@ave. It can be done by obtaining a reference number via the AEAT website (there has been another very recent thread about how to do that, I'm sure), as long as you have a copy of last year's return so you can look up the figure from a certain casilla which they ask you for. My husband and I have both done our 2018 returns already this year via this route.

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Re: Possible error on Modelo 100 tax return

Postby El Cid » Thu May 09, 2019 8:21 pm

Lavanda wrote:
The moral is don't go near the tax office. Most of them haven't got a clue about foreign pensions, especially UK government pensions.
Maybe. However, if you go armed with all the information and you tell them what to do the system works just fine.
Sadly that is not true.

I was looking at a friends tax situation today. It’s all about the imputed rental income on a second property. In this case it is in the UK but the tax still has to be paid.

Looking at the figures, his gestor got the valuation wrong by a factor of 90% giving a ludicrously low figure. He then went to the tax office and they put this low figure in the wrong box (they added it to their small savings income).

If you have a simple tax situation, ie pension (not govt) plus some simple investment income, then they will get it right. Anything more complex seems to be well outside their experience. If it’s that simple, you can do it yourself in a few minutes.

Sid

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Re: Possible error on Modelo 100 tax return

Postby Lavanda » Thu May 09, 2019 8:24 pm

Thanks. I’ll look back and find the thread but, really, I need less to do, not more. Currently bottle-feeding an orphan lamb, on demand, round the clock. He’s called Nigel ...

Yes Sid. I wasn’t being flippant but complicated things do seem to defeat the Spanish ...


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