RESIDENTS TAX RETURNS 2010

OK, it’s that time of year again when preparation for the filing of Annual Tax Returns starts.

It is an accepted part of life for those working in Spain.

However, for those who “just live” in Spain there is the belief that there is no need to file a return in Spain because taxes are paid in the UK:

This illusion has been held by many for years. But it won´t be for much longer. The Hacienda now has access to the Catastral and already letters have been received asking why a property owner is not registered for Tax, whether it be as a resident or a non resident.

Where previously no one really bothered about who was paying tax and where, in the current climate and with the need to raise more revenue this will no longer be the case.

Indeed many who have bought a resale property have never received any advice on their Tax situation and are oblivious of the requirements. Unfortunately, ignorance is no excuse.

You have been warned!

To set the record straight.

If you are a non resident (are not in Spain for more than 183 days) then you need a fiscal representative. Further you should file a non residents tax declaration.

If you live in Spain for more than 183 days of the year then you are a resident of Spain and should file an annual tax declaration.

You will not be required to pay tax twice, as there is a double taxation treaty between Spain and the UK. For those on a Civil Service pension there is no option but to pay the tax in the UK.

Declarations for the year 2010 are now being prepared. The time to file a residents Tax Return is May-June but you need to get your paperwork in order now. The final document required will be a P60 usually received in April.

As with all tax related matters personal circumstances vary so it is vital to get advice. To assist expats we are holding weekly surgeries, which are free of charge. All you have to do is phone and make an appointment.

Finally there are benefits to filing a residents Tax Return in Spain, where allowances are given against mortgages, children etc. As with the UK there are personal allowances. There is also the option for a married couple to file a joint return, which can be of benefit. It can also assist when calculating Inheritance Tax.

For more information or to make an appointment please see http://www.costablancalawyers.com/ and don´t forget THE FIRST CONSULTATION IS FREE

MAKING A SPANISH WILL

No matter how many times we write about it people still don't realise how serious it is that they have a Will to cover their assets in Spain should they die.

For many they seemingly believe that it doesn't matter. Well it does.

All too often we are left with the remnants of once a happy life.

Firstly, a loved one has passed away. Then when it comes to the practicalities of sorting out the assets it becomes clear that everything is not in order.

With no Spanish Will we have to look at alternatives. If an English Will exists then we have to look at whether there are any assets in the UK upon which we can obtain Probate. Sadly, when many move to Spain they move all their assets as well so there often isn't anything.

If that is the case then working our way through the complicated system to identify the legal inheritors is both time consuming and can prove expensive.

It leaves the family fustrated and unable to comprehend why this situation exists. As many will know the laws of inheritance in England often do not cause too much problem if someone dies without a Will. This is not, however, the case in Spain.

One fundamental problem if obsticles can be over come is that of Inheritance Tax. Again the difference in application of this tax is often a surprise to those involved.

The simple solution is to get a Spanish Will covering your assets. You can leave them to whoever you wish as you are governed by the laws of your nationality not Spain. However, be warned the Inheritance Tax implications can be enormous and serious advice should be taken from those that really understand the implications.

There are many who will prepare a Spanish Will with a basic understanding but really knowing the consequences for a Client is paramount. If an advisor is not able to tell you the Inheritance Tax figures then be careful.

For anyone considering making a Spanish Will they should consider carefully just who they are going to leave their assets to. There may be practical problems as well as financial. A good advisor will be able to guide you in the right direction.

Making a Spanish Will does give peace of mind and once done should not need to be changed.

Throughout April Costa Blanca Lawyers are doing Spanish Wills for 100€ plus the Notary Fee.

For anyone wanting comprehensive advice on Spanish Wills and Inheritance Tax then see http://www.costablancalawyers.com or email them at webenquiry@costablancalawyers.com.

This article was written by Jo Caress of Costa Blanca Lawyers