Tax returns for resident pensioner - Page 3

Hi patsyd,

As Joanie has since posted, her original post was incorrect - she said that she had been resident in Spain since December 2021, but latterly corrected that to December 2020, in which case she is already tax resident and, as such, has missed the deadline for filing her first Modelo 720 Declaration of Assets.  If she doesn't have assets that exceed €50k in each of the 3 asset classes, then it won´t be a problem.  However, she must make a Modelo 100 tax declaration this year, even if ultimately there is no tax due.  This is important for all residents who are drawing UK state retirement pension and receiving Spanish state healthcare via an S1, as the Modelo 100 income declaration determines the percentage they will be charged for prescription drugs.

Kind regards,

Kim

Ah, I didn’t see the post about it being December 2020 Kimmy. I thought you had until June to submit your returns, according to our solicitor. We’ve done that ever since being resident l

Thanks for the update I’m trying to get some help with this but still waiting for replies . Does this still mean we need to do it by end of June ? We have no assets in UK just our pensions and property here

Hi Joanie,

If you´re on full UK State pensions, which are taxable in Spain, they will exceed the basic personal income allowance in Spain.  Depending on your age, there may be additional allowances available to you and, if applicable, this should be explained to you by your asesor fiscal.  The deadline for submitting the Modelo 100 Income Tax Return this year is 24th June, but unless there are queries to be resolved, the asesor can usually complete and submit the return electronically to the Spanish tax office (Agencia Tributaria) when you meet with them.

Kind regards,

Kim

Hi there.

My husband I have been permanent residents for 10 years.

We have a lawyer who also advises us on tax.  She charges 40 euros each.  My husband completes each year the HMRC tax form. Going forward as we now do not pay any taxes in the UK our lawyer submits our Spanish taxes for us.  Good luck

Hi all 

Both my and my partner's income tax situation is very simple....

I only have payments from a personal pension in the UK - simples, no state pension yet.

My partner also has a small annuity, plus two payments from the DSS, due to health problems, no state pension.

We do our Spanish tax returns online. Basically all we have to do is fill in the box numbered 003 (having converted GBP to euros using the exchange rate as of 31 Dec) with our income for the year. Also supply address details (assuming you own your home in Spain).

The website then calculates everything else - but you have to decide if you want to contribute to the Catholic church!!

The only issue, if it's your first time, is to get digital ID in order to access the website.

Cheers 

Steve 

Hi Kim, apologies for replying, but you always seem to offer sensible advice

My husband and I are both in our 50’s, managed to get here before December 2020 and our Residencia is dated March 2021

We paid for someone to do our Modelo 720 this year, now concerned about the Tax before June

We do not work and have no pension due to our age, only income is a small amount of rent in the Uk which has a Buy To Let mortgage 

What are our allowances I’m sure we may be under the threshold?! Would we still need to submit 

Thank you in advance

Gail

I also use Angela, and must say that I pay less than the Gestoria mentioned here at €77 per person! 

Hi Gail,

When you say that you arrived before 31 December 2020, but your residency is dated March 2021, does that mean your residency was obtained under the terms of the Withdrawal Agreement?

As I'm sure aware, the Modelo 720 is a declaration of worldwide assets.  You aren't taxed on your assets, only on income derived from them.  The current basic rate of individual personal allowance in Spain is €5,550.  A competent asesor fiscal should calculate whether it's more tax efficient for you and your husband to submit individual tax returns, or a joint return if, indeed, you need to submit one at all.

I also own a rental property in the UK and our situations sound similar.  I don't expect you to share specific figures on an open forum, but if you'd like to discuss this in more detail, please send me a PM.

Kind regards, 

Kim

Hi Janice,

We don't use a gestoria to do our tax returns, we use an asesor fiscal - a tax specialist.  Abaco Advisers charge €154 per year (€77 each), not just for our tax returns, but any other financial advice we need during the course of the year.  Just one example: I have two private pensions in which the funds originated from company pensions in the UK.  Abaco advised me that Spain does not have an equivalent, so the Agencia Tributaria does not require them to be declared on the Modelo 720.  As and when I choose to take any income from them, that will have to be declared on the Modelo 100.  This is important because, whilst tax isn't paid on the worldwide assets declared on the Modelo 720, their value determines the rate at which we are taxed on income.  My husband's "Crown" pension has to be taxed at source in the UK, but it also has to be declared on the 720.  This pushes him up from Spain's base tax rate of 19% to the next level of 24%, so he has to pay 24% on his other income from savings, investments, etc. in Spain. If I'd had to declare my company pensions on my 720, I would also be paying 24% on all my income, instead of the 19% which I currently pay.  Having a qualified and competent tax specialist has more than saved me the extra €20-€30 per year that some members are spending on gestors.

Abaco have specialists who, every January, make a detailed review of all changes to tax law issued by the Hacienda.  Consequently, every year, should Spanish tax law around UK company pensions change (or anything else that impacts our tax declarations), I have no doubt that Abaco will ensure that we remain compliant with Spanish tax law.  I doubt the average gestor even knows this annual review needs to be done, much less has the time or skill to do it.  I wouldn't recommend anyone to use a gestor for their tax affairs; the 'skill' of gestors, for which they need no formal qualifications, is Spanish bureaucracy.

Kind regards, 

Kim