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View Full Version : How do you stop paying non resident letting tax once you become resident in Tenerife?



Suzanne
13-10-2011, 21:55
can anyone help?
now that a friend has become a resident (pensioner) how does he stop paying this letting tax that he has paid for the last 4 years 2007 to 2010, 2011 still pending.
he has never let his property out but has now finally come to live permantly in tenerife and we need to know what to do to cancel!!! this.

Any help will be appreciated.

hopefully the ever knowing Janet or Goldenmaniac might be able to help.

Thanks in anticipation.

doreen
13-10-2011, 22:39
Unless you tell the Spanish authorities that he is now resident, he will still be presumed non-resident and liable to the deemed rental income. So he needs to declare himself Spanish tax resident by applying for a tax residency cert (probably with the help of a Gestor :))

Good explanations here of when to fill out a Spanish tax return
http://www.advoco.es/hot-topics/39-do-you-need-to-submit-a-spanish-tax-return.html#S9

Situation 9: My only income is a pension

Usually being in receipt of a pension from your former country of residence will require you to make a Spanish declaration, even if tax has been deducted at source before you received it. However the 22.000€ limit discussed in 4. above applies to pensions as well as earned salary so you may get an exemption on these grounds. Note that the limit falls to €11.200 if (like a UK state pension) the income has not been taxed at source or if you have more than one income source.

However you may wish to register for Spanish tax and declare in Spain even with a small pension. For example say you receive a private pension from the UK and tax is deducted at source. If you register for Spanish tax, you can then get a certificate of tax residency from the Spanish tax office and use this to get your pension paid gross without tax deducted. This will be tax free in Spain up to around 8.000€ if you have no other income to declare because of the personal allowances you receive.

There are also pensions that, under various tax treaties between Spain and various countries, are taxed in the home country and ignored for Spanish tax purposes. Under the UK-Spain tax treaty, government pensions paid to retired civil servants, police or armed forces personnel are treated in this way. If you have a pension in this category it will be taxed in the UK and not in Spain. If you have another source of income such as investment income this is taxable in Spain but with a full quota of personal allowances in addition to those you received in the UK against your pension income there.

Goldenmaniac
14-10-2011, 06:35
He will need to advise the UK (if that's where he was tax resident before) by way of a P85, see the direct.gov.uk web site for info or the Uk tax office here http://search2.hmrc.gov.uk/kb5/hmrc/forms/view.page?formid=766&record=5Ay4eloD0nw
When that is processed he will need to do a modelo 30 here to advise the Spanish Hacienda and then he will do a declaracíon de la renta (anual tax return) here in the May/June following the year he becomes (became) tax resident here.
Remember tax year here is Jan to Dec not Apr to Apr like the UK.

Suzanne
14-10-2011, 21:52
thank you very much.