Resident Tax Query

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PavAmber
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Resident Tax Query

Postby PavAmber » Sun Feb 18, 2018 5:32 pm

Hi. Any information/pointers appreciated.

We will be completing our first annual resident tax return in the next month or so for tax year 2017. We were tax resident for the whole year.

Income is just from 2 private pensions (early draw down, not annuity). These have been taxed at source and continue to be taxed in the UK. HMRC have informed me that we will continue to pay tax in UK until I have completed our Spanish return and supplied them with a "Residencia Fiscal en Espana Convenio" form which I believe we can't obtain until completion of a tax return here?

Questions:- On completion of our tax return,
- Do we pay income tax at Spanish rates in addition to that already paid in the UK? Seems unfair. Or:-
- Do we pay difference in income tax rates between UK and Spanish rates?
- What is people's experience of using a gestor or similar to complete the return? We have spoken to a few (on different matters) and are concerned that we always seem to get different advice on matters.
- Do they actually give advice or simply act as tax collectors for the government?
- What would be a typical fee for assisting with the return?

Thanks in advance.

El Cid
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Re: Resident Tax Query

Postby El Cid » Sun Feb 18, 2018 5:55 pm

Very simple. You pay Spanish tax in full on all your income. If that income has been taxed in the UK, you can deduct the UK tax from the Spanish tax.

Once you have made your first declaration in Spain it should be possible to get the certificate from Hacienda and then HMRC should allow your UK income to be paid gross.

As a HMRC official once said to me “we won’t take you off our hook until you prove you are now on someone else’s hook”.

Gestor’s prices vary from €50 to €100 for a simple declaration. For a joint declaration they may try and charge you more. They are basically ripping you off as it takes them 10 minutes and they do it online. If they get it wrong it’s your fault, not their’s.

If your Spanish is up to it the tax office will give you an appointment and they will do it all for you - free.

Sid

PavAmber
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Re: Resident Tax Query

Postby PavAmber » Sun Feb 18, 2018 6:21 pm

El Cid
Clearest explanation I have had, thank you! I had a horrible feeling that I was going to have to pay twice until HMRC recognised that I was now a Spanish tax payer. From what you say, I/we will actually pay the difference between UK and Spanish tax rates which seems sensible (appreciate Spanish tax rates are higher).

Many thanks

elusive
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Re: Resident Tax Query

Postby elusive » Mon Feb 19, 2018 10:36 am

Have you filled in a double tax form from hmrc. Once you have filed your spanish tax return and got the certificate you send it back to hmrc.your tax code will be changed to NT ie no tax and you will get a refund of the tax you paid in the uk (more or less) covering the time you paid "double tax'

Thats how it worked for us back in 2015

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Wicksey
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Re: Resident Tax Query

Postby Wicksey » Mon Feb 19, 2018 11:19 am

We pay 75€ for the two of us. Our gestoria will either do 2 separate returns or one joint one whichever works out best.

If we only had pensions I'd do it myself but we are landlords which make it a bit more complicated (for me anyway) so we don't mind paying her to do it. (We still have to do UK tax returns, which I do myself, although we'll probably never earn enough to pay tax there but they still seem to want them every year.)

elusive
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Re: Resident Tax Query

Postby elusive » Mon Feb 19, 2018 12:40 pm

Yeah same here. We do self assesment as we rent the uk house out.dont owe anything at its owned 50/50 and not in the south east!

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fyfin
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Re: Resident Tax Query

Postby fyfin » Tue Feb 20, 2018 9:33 am

I think as long as you rent out a UK property you still have to do a UK tax return. At least I believe that's what we did but as it's been sold 2 years now, the only returns are Spanish.
A man likes his wife to be just clever enough to appreciate his cleverness, and just stupid enough to admire it

PavAmber
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Re: Resident Tax Query

Postby PavAmber » Tue Feb 20, 2018 1:53 pm

Thank you all.

We don't have any other assets in the UK now as we moved lock, stock and barrel. Hopefully that will make life simpler.

I completed my HMRC self assessment for 2016-17 and asked for "split treatment", not that it seems to have made much difference! Off to see a Gestor today. HMRC wont move us to a NT code until they receive the "Residencia Fiscal en Espana Convenio document which I don't think is obtainable until I have done my 1st Spanish return.

I am hoping it is as simple as showing:-

Income for 2017 minus tax paid in UK already = amount still to be taxed at Spanish rate. Rather than.

Income for 2017 all taxed at Spanish rate having already paid UK tax (in effect paying twice) then trying to recover from HMRC.

Incidentally, I am staggered at the amount of local "experts" who think we are mad to complete a Spanish return "you've already paid in UK mate"!

PavAmber

elusive
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Re: Resident Tax Query

Postby elusive » Tue Feb 20, 2018 3:21 pm

Tbh recovering the tax already paid to hmrc was surprisingly easy.once they had the fiscal espana i think it was re paid within weeks.the only issue was inregards to if i remember right the conflict of how the tax years ran and some couldnt be reclaimed so it may better doing as you mention

But yeah as you say you cant do anything until you file your spanish return


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