What UK Tax Refund SL can help you with

UK – Spain Double Taxation Agreement (DTA)

A DTA exists between the UK and Spain, which effectively means you will not be taxed twice on the same income. As this agreement has nothing to do with the EU, but is a direct arrangement between governments, it will not be directly affected by Brexit.

The process of becoming a fiscal resident in Spain means you have to get your tax affairs in order and pay tax accordingly, recovering if applicable any overpayment of tax that is due to you. It can be a complicated process because it all has to be done in the correct manner.

UK Tax Refund SL acts with competence and discretion to ensure you are correctly integrated into the Spanish system and account for tax correctly.

Please note: The UK and Spanish tax years are different. The Spanish tax year is 1 January – 31 December; In the UK it’s 6 April – 5 April.

Declaration of Worldwide Assets (Form 720)

If you live in Spain and/or your business is registered here, and personal or corporate assets outside Spain amount to €50,000 or more, you are required to submit a Modelo 720. This form was designed by the Spanish government following EU rules to combat tax evasion and money fraud, and you should fill it in if:
• You have bank accounts or other accounts with financial institutions abroad with a total balance of €50,000 or more.
• You have securities, investments, life insurance or annuities, held outside Spain and collectively worth of €50,000 or more.
• You own real estate abroad, or have an interest in a property with a purchase value of €50,000 or more.

All of the above applies even if the value of your share or interest in an asset amounts to less than 50,000€.
The financial penalties for failing to submit a Modelo 720 can be stringent, so it’s best to consult a tax expert on this matter. Also, countries are now collaborating in the exchange of information, so it’s important that foreign assets are declared if their value is €50,000 or more. If in doubt just ask, it could save you a lot of money.

Non-Resident Tax:

It may surprise you to know that if you own a Spanish property as a non-resident of Spain you are required to pay the Non Resident Tax.

If the property is for your own private use and not generating rental income the tax is paid annually based on the rateable value of the property (valor catastral). If the property is generating rental income then the tax is paid quarterly based on the net rental income.

While many people are not aware of this tax, that is no defence against failure to comply, and financial penalties will be charged.

Our advice is, if you haven’t declared your property interest as a non-resident and paid the corresponding tax, do it now. We can guide you through the process efficiently and easily, and once set up it’s easy enough to deal with each year.

Conveyancing for property purchases and sales:

Property conveyancing is very different in Spain, and there are a number of unfamiliar tax implications. Once you are ready to proceed, UK Tax Refund SL can guide you through the process of the sale or purchase. We can carry out all the necessary checks, right up to the signing of the title deed at the Notary Office.

With our extensive knowledge of taxation in Spain, we can give you an accurate assessment of your final tax liability as a buyer or seller once the transaction is completed. This takes a lot of the stress out of the process of conveyancing, and guarantees legality at every step, so there will be no problems if circumstances change in the future.

Capital Gains Tax:

Capital Gains Tax is paid on financial gains made from the sale of a property or other investments. As with all matters to do with tax in Spain, mistakes can be expensive, so it’s important to get it right first time if possible. Expert advice makes all the difference.

If you are resident in Spain, but sell your property in the UK at a profit, you are still eligible to pay CGT in Spain. And circumstances may change depending on whether this is your habitual residence or a second home. Age and residential status also come into the calculations.

Certificate of Fiscal Residence (CFR):

The CFR is issued by the country of residence for taxation purposes. If you want to sell your property in Spain, it’s important to have this document, even if you are a resident, since having Spanish residence status only proves you are a civil resident. As mentioned under the Capital Gains Tax, the situation may not be straightforward when selling a property in Spain, either as a resident or non-resident. Obtaining a CFR makes the sale easier, and prevents inadvertent mistakes in the taxation process, if the estate agents are not up to speed on the law at the time. It can take a long time to get overpaid taxes returned, so it makes sense to use experts such as UK Tax Refund SL to obtain your CFR.

Spain Resident Annual Income Tax Return (Renta)

If you are a British national living in Spain, or spending more than 183 days a year here, you are required to complete income tax returns based on your income from all sources worldwide. Many of our clients are UK nationals who have retired here, with pensions from a number of different sources. Some of these are taxable in the country of origin, while others will be taxable in Spain – if, indeed, they are taxable at all!

It needs comprehensive knowledge of the various types of pensions, as well as the UK and Spanish taxation systems, not to mention the Double Taxation Agreement, to navigate through this, put the right numbers in the right columns, and come up with the correct figures for taxation. This is what we do well at UK Tax Refund SL, and we can guide you through the process with confidence, clarity and compassion, saving you a lot of stress, to say nothing of the financial penalties that may arise from errors in your personal tax liability calculation.

Uk Self Assessment Tax Return

If you are receiving rental income from a UK property or fulfill any of the self assessment criteria you need to submit a Self Assessment tax return to HMRC in the UK, even if there is no tax liability. As UK Tax Refund SL is a registered agent for HMRC, we can file your return for a very competitive price, and save you time, money and worry. It’s one less thing you need to worry about.

Inheritance Tax

With reference to this tax we need to take into consideration that both countries, UK and Spain each have a different approach, and the fiscal benefits are different, not only in each country, but also depending on the Autonomous region where the deceased lived and also where the beneficiaries live. The fact whether the beneficiary and/or the deceased is a resident or Spain, is to be considered as well. Taking into consideration what is mentioned above, it is paramount that, if you have assets in Spain that at some point could be affected by inheritance tax, to write a Will which as well as following your wishes, is also efficient with reference to the tax the beneficiaries will face.

Tax Efficient Wills

This is a list of our main services, but it’s not exhaustive. Please give us Why is it the majority of the British Nationals living in Spain have similar Wills, when their personal circumstances are different?
As a British national you have the testamentary freedom, namely you are free to bequeath your estate in accordance to your wishes.

This is the reason why it is very important to write a Will in Spain, in which you make use of your testamentary freedom in accordance with your National law.

If there is no Will, then the inheritance process will be dealt with under Spanish law, in accordance to the legitimate heirs, therefore there is no testamentary freedom.

When writing a will it is necessary to take into consideration two important things, one it is in accordance with your wishes and two, it is efficient when it comes to inheritance tax.

Writing a tax efficient Will is the best way to get peace of mind knowing that when the time arrives dealing with such a complex process during what is also a very difficult time emotionally, it does not attract taxes which are virtually impossible for your beneficiaries to pay.

If you don’t see it here – ask!

This is a list of our main services, but it’s not exhaustive. Please give us a call if the issue you need help with isn’t listed here. We have extensive experience in all aspects of personal taxation, so we can help with most things. And if we can’t, we may be able to recommend someone who can!