Non-resident taxes - confusion

Poedoe. You say you could write a book with all the stuff that has happened to you. You should try and write that book. It doesn't have to be perfect, but if you put pen to paper today and started to write it all out you would find it very cathartic. Also, by either blogging it on this site and/or putting it on amazon as an e-book (which is pretty straightforward - you just follow their instructions and copy the completed document onto their site) you could help others to avoid some of the problems you experienced or at least to help them feel not so alone with their problems. Personally, I'd buy the book as it is very interesting to read about real people's genuine experiences in the mad country that is Spain. Or maybe your wife could write it. This could be an important legacy that you leave behind. All the best with it.

Because of the poor service we received from our lawyer (AROCA SEIQUER ASOCIADOS, Alicante) who fail to advise us of the Builders crooked deals and other details, we refused to pay any more annual fees. They failed to notify us of the lack of Habitation Certificate & utility meters which the Builder charged us for through the Lawyer. The Notary (ANA MARTA GIMENEZ GOMIZ) informed us that the final deposit of 26k plus the same value payment from the Builder would be held until all the work was completed. Entrance road surface to the complex, Lift, Utility Meters, Street lights Etc. The Builder IDEARCO (www.idearco.com) address Rumbla Mendez Nunez, 28 3 03002 Alicante. They are still trading under a different name. The Notary paid the builder the 52k even though the work has never been completed, few months after we completed our purchase. 8 years & 2 Administrators later our complex is still incomplete. The Community fees for some time has been €80 - €100 a month. The Builder failed to pay some of his utility bills during the construction and the owners paid €1500 each to clear the debt so that they could keep the utilities working. the community is now receiving the utilities which is the reason the fees are high. The builder under dark removed the electrical motor for the emergency water, ??We were informed it was fitted into one of his other sites?.

Although Our Administrator,s and our Wonderful President (who has now retired possibly due to exaustion) have worked tirelessly to sort the complex problems at very high costs. We are still in the same position & have to pay €70 for a meter connection each time we wish to stay in our property plus the usage which was arganised by our Administrators,The €80 community fee did cover the utility costs. After the complex suffered huge amout of damage from the undesirable Builders Tenants and their so called squatters. we are left with huge debts & It will take years to sort out with only the Non National owners paying on time. It seems that the Builder & the non paying residents will only have to pay three years of the debt that they have left behind

My advice to anyone purchasing in Spain check & double check all stages of your purchase. We did but continue to suffer. Although we love our Apartment I wish we had never seen it.

The 210 tax is exactly what it says - "an imputed income tax".  It goes into national funds.  Local amenities are paid for out of the IBI and the other amenity bills (water and rubbish collection. It is really a wealth tax under another name and is totally unjust, although my attempts to persuade Europe of this have been unsuccessful.

Johnzx- can you clarify the bit where you said if you both live there will be no IHT to pay ?

Surely it depends .

Campo

Sorry, I really messed that post up. 

It should of course  have been that the non-res property owners tax (form 210) is shared between the owner (not a double hit as the poster had said) and that as in this case,  the couple are not tax resident they will be liable to IHT. 

Johnzx, Think this is what campo was referring to.....when you posted

" If you both live here then there will not be IHT to pay." Unquote.

Floella, 

If they are tax resident, over 65 and have lived in their  principle home for 3 years they can sell it without paying any Capital Gains Tax.

Also if one dies, the spouse will not pay IHT as long as they keep the property  for 10 years, or until they die.

That , John is how I view the situation regardless of where one resides in Spain. However from reading past postings I believe Campo thinks differently. Which is why she asked you for clarification.

 As I said,surely it depends on:

Whether the residents ARE fiscal residents, over 65, and lived in the property 3 years plus

Whether the remaining Spouse does keep the property  for 10 years. In reality, expats usually sell it and /or downsize, I n which case there will be  some IHT to pay

You just wrote that there would be no IHT to pay if they lived here.That is not always the case.

I recently had my non resident tax forms prepared for me,the doing it charged me 155 Euros...He isn't a solicitor.

He said the charge was high because he said there was 4 lots of forms to complete...One for my apartment,one each for two parking spaces and another for the storage unit.When I took them to the bank to pay them the lady said that it should all be done on one form and not four.

Can anyone tell me who is correct...am I being fleeced?

Soto Dave.

My son's accountant said the same, separate 201 for each property   .( I think the boxes on the 210 only allow for one property per form).  It used to be different.

 I do my son's 210's with a separate one for each property.  Each form takes no more than 5 minutes to compete once one has the relevant info. 

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Campo

As I said, surely it depends on: Whether the residents ARE fiscal residents, over 65, and lived in the property 3 years plus Whether the remaining Spouse does keep the property  for 10 years. In reality, expats usually sell it and /or downsize, In which case there will be  some IHT to pay You just wrote that there would be no IHT to pay if they lived hereThat is not always the case.

Campo,  I qualified my post when I replied to Floella. 

Incidentally although the concession applies to the spouses it also includes others, I believe family member. The law was brought it to protect family businesses which were being lost because of succession taxes, hence the 10 years retention requirement.

However, I am pretty sure the info is from an Agencia Tributaria (Hacienda) web page so it applies to all of Spain not just some Regions.

 Sorry but I don't have the time to go trawling through the internet on this so that I can point you to the actual page.

Thanks John

So in all it would have taken the gestor 20 mins to complete...and charge 155 euros...WOW...time to learn how to complete these myself

Dave   see my post on 25th Oct.(above / below, depending on your view)  That tells you how to do it.

Or you could just shop around.   

155 € is a rip off.

Our 'wealth' was made in the UK, our savings use tax efficient UK environments, there is no way that we will ever throw ourselves at the mercy of a foreign revenue regime. If we were to buy a property it would only be via a UK Ltd Company where all Spanish property taxes would be paid through the company, also there would no individual Spanish IHT to pay as a company does not either marry or die.

I believe that the 180 (or is it 183?) days rule actually costs Spain revenue rather than raising it, but it's their rule, stupid or not, and needs to be respected. We would have no trouble in paying out dues and demands in the UK, whilst spending 6 months p/a in Spain.  

crook

The 183   is one rule about tax residency, however, there are others, which include:  if you main home is here, Centre of activities, your family live here, etc.   If you are included in these then you are tax resident here.

I have taken advice from several professionals re buying in a company name. The consensus was that it is not a legal alternative.

From what you say you may be best advised not to have anything to do with Spain

crookesey

I think you should see a good International financial adviser who is up to date with Spanish tax law. I understand that Spain made it  MORE expensive, regarding tax, to put a property into a limited company. So be careful.

The 6 month rule is not a Spanish rule but most countries have the same rule. The U.K. also uses the 6 month rule so if you are outside the U.K. for more than 6 months then you are not a U.K. resident and therefore don't pay U.K. tax on "investments".

If you are not a U.K. resident there are certain off-shore 'safe' investments that are not subject to U.K. tax (as they are off shore) but as a resident in Spain you only pay tax on 25% of the gains. Much better than on-shore U.K. where you pay tax on all the gains.

It is interesting that you indicate that you would like to be a resident of Spain but not pay their taxes. I expect you would also be one of the first to complain in the U.K. about foreigners who are not paying all their U.K. taxes with the likes of Amazon etc. who are avoiding U.K. taxes on a far larger amont that you are talking about.

I might suggest that one gets ones facts right before commenting on here.

John,

It's perfectly legal in respect of avoiding Spanish IHT, also a property only inhabited for 180 days p/a cannot be classed as a main residence when this is actually in the UK.

Have a look at this

www.winchamiht.com

Dave

Steone

if you are outside the U.K. for more than 6 months then you are not a U.K. resident and therefore don't pay U.K. tax on "investments".

Of course you are right, however, some institutions, the Nationwide Building Society for one, will not pay interest gross, thus 20% is stopped.  One can claim back 8% fromHMRC and then use the 12% to off-set against taxes in Spain (the 8 and 12 might be the other way around).  If you have no tax liability in Spain,  then you just lose it.

Crook,  cannot be classed as a main residence when this is actually in the UK.

please read what I said.  (if your main home is here  i.e. not anywhere else)

Hi everyone, Many thanks for all the information you have sent. It seems that those of you that have a lawyer looking after your legal business in Spain are paying more non resident taxes through your lawyer. Because I sacked my Lawyer for the poor service we recieved. It seem we are only paying the correct non resident tax through our Spanish Bank, unfortunatly we do pay double because the account is joint, but we are not being fleased by a lawyer.

With your lawyers your don't seem to be any further forward that we are with the problems of obtaining the HC. This is another odd issue. Some say the HC is not a legal document. Then why are the local government in Alicante not providing ours. It took 9.5 years for a complex build by the same builder to obtain theirs. We live in Hope but feel they will make us wait.