when to pay Capital gain

Information and questions about the Law in Spain and Andalucia.
linne
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when to pay Capital gain

Postby linne » Wed Oct 05, 2016 3:01 pm

We have sold our finca (bought in 1980) and a plot (bought in 1998) in March 2016. We felt that it was too complicated to find out how to handle the capital gain, so we had a gestor to do it. She made a Modelo 210 and told us that the capital gain would be taken from our bank account in August. But the money is not yet taken from our account. We have contacted the gestor to have an explanation- if anything is wrong and if so, who the Hacienda will write to. The problem is that we dont have an Spanish adress now, and we don't know if they will write to our home adress. But she hasn’t answered us.

We are a little nervous about the situation. We have- among other things- had a discussion about the way to calculate the buying price. Also we didn't have much time to look at her calculations, because we got them the day before she had to send the formular, and at that time we were on vacation. Afterwards we tried to control the figures on the Modelo, but it is very difficult for us to see, if everything is done in the right way.

Does anyone have experiences about how and when to pay capital gain? And if the Hacinda will write to the gestor or us, if anything is wrong?
Or other good advice?

Thank you in advance,

Linne

Miro
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Re: when to pay Capital gain

Postby Miro » Wed Oct 05, 2016 5:35 pm

First of all, as non-residents, 3% of the total sale price would have been retained by the buyer to pay to Hacienda in lieu of any capital gain arising from the sale. Do you know if this needs to be supplemented? Secondly (and others more knowledgeable than me will correct me if I'm wrong) your annual modelo 210 is submitted for income arising in the previous year, so any tax due on a gain arising in 2016 would be payable in 2017 - maybe your gestor meant August 2017? Thirdly, don't know what you mean by "calculating the buying price" - surely you know how much you paid? Only advice I can offer is keep trying to contact your gestor for clarification - any answers here are likely to be mostly guesswork.
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Beachcomber
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Re: when to pay Capital gain

Postby Beachcomber » Wed Oct 05, 2016 10:18 pm

The 3% retention has to be paid by the purchaser to the tax office within a month of the transaction. The seller then has three months from the date of this payment to submit a capital gains tax declaration and either claim a refund (if the 3% was more than the amount of the capital gains tax to be paid) or pay the difference (if the 3% retention did not cover the amount of the capital gains tax). This return and any payment due should have been made by July at the latest.

As the purchase of the finca took place in 1980 the calculation would be fairly complicated. The number of days from the date of purchase to the date of sale has to be calculated and then the number of days from the date of purchase until 19th January 2006. One is divided by the other and multiplied by the difference in the purchase and sale price then a reduction is made according to the number of years the property was owned prior to the 31st December 1996. As you bought the property in 1980 the reduction for this period would be 100%.

Do you have a copy of the forms 210 upon which the capital gains tax declarations were made? There would be one for the finca and one for the plot of land assuming they remained separate during your period of ownership.

linne
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Re: when to pay Capital gain

Postby linne » Thu Oct 06, 2016 9:11 pm

Thank you for your answers.

Concerning the paying of 3% everything is okay, but we still have to pay much more. It shows up that a lot of our factura's was without VAT - even from an architect and a lawyer on official factura's. We were never asked, if we want to pay without VAT and haven't thought of controlling it.

We have a copy of form 210 for both the plot and the house, but even though we are not stupid people, we are not able to see if the figures are right.

Concerning the buying price of the house it's complicated. We bought a plot and a not built house. The price in the deed was only for the plot and much lower, than what we paid. We were told that it was normal - remember it was in 1980! The house ended up to be illegal, because it was on farm land- we can tell a very long story about that experience. We never had any factura's from the building of the house!

But for about 10 years ago, we had a deed on the house, and in the deed we had to value the house.The lawyer, who helped us, told that this value would be the value, which should be used, when we sold the house. But the gestor didn't use this value , but used the value from the old deed. So of course we were not satisfied with that. She changed the value, but were not sure, if it was right.

We know that even though we pay the capital gain now, we cannot be sure that form 210 is accepted. But it's only a small finca we have sold, and the value from the new deed, which is used as buying price, is not very high. So we don't hope there will be any problem and are only looking forward to be able to close the case about our sale.

Concerning the plot the price in the deed is what we paid, so it's not so complicated.

Concerning which time to pay we were only told that we had to pay in August. We haven't thought that it could be in 2017.

Sorry about the long explanation. Perhaps we have to contact the gestor again. But she seems to be busy, and we have allready paid her salary, so we are afraid that we don't have a high priority.

So if someone has some experiences about when to pay, we will be glad to have some information.

Linne

Beachcomber
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Re: when to pay Capital gain

Postby Beachcomber » Thu Oct 06, 2016 10:58 pm

In this situation the sale price must be calculated in each case using both the original purchase value of the land and also the value of the escritura de obra nueva in the same proportions which both values represent as percentages in respect of the whole.

This means that both columns on the form 210 in section 210 H should have calculations in them, one set for the original purchase (adquisition) and one set for the second acquisition (Mejora o 2ª adquisition) also taking into account the percentage reductions as detailed in my previous post. However, you cannot balance a loss in one column against a gain in the other. The whole thing is very complicated and I have yet to come across a lawyer or gestor who is capable of doing the calculations correctly.

It is correct that a separate form 210 for the sale of the plot has been completed but the 100% deduction should have been made for the appropriate period of ownership as detailed in my previous post.

If your capital gains tax declarations are not done properly it will make a huge difference in the amount of capital gains tax due and could cost you thousands of euros unnecessarily.

linne
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Re: when to pay Capital gain

Postby linne » Fri Oct 07, 2016 4:43 pm

Thank you for taking the time to answer us Beachcomber. I really don't know what's the best to do. I had to admit that I'm not sure I'm able to control Form 210 myself, even though I have your explanation . The gestor seemed very nice and experienced, when we met her, but we were disappointed that we need to accept her work in such a hurry, and that we had to tell her that we want her to use the valuation from Obra Nueva, which meant that the capital gain became 9.500 euro lower! Also I don't know , if it's too late to correct something, if the declaration is wrong, and it's in our favour. Do you know anything about this, and do you know when the capital gain has to be paid?

Linne

Beachcomber
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Re: when to pay Capital gain

Postby Beachcomber » Fri Oct 07, 2016 4:57 pm

The capital gains tax has to be paid within three months of the retention being paid by the purchasers to AEAT.

If it transpires that there is an error in your favour in respect of the capital gains tax return it can be corrected but this means submitting a claim to AEAT and a correct declaration being made. If it turns out only to be a few euros it would not be worth it but if it is more than €100 or so then obviously it would be.

I reiterate that both the original purchase price of the plot AND the obra nueva should be taken into account when calculating the gain but you cannot just add the two together. You must enter the sale price in respect of the original purchase by calculating the percentage that the purchase represented in respect of both the original purchase price and the obra nueva added together and apply it to the sale price.

Can you confirm that both columns in section H of the form 210 have been completed or only one.

linne
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Re: when to pay Capital gain

Postby linne » Fri Oct 07, 2016 10:09 pm

Thank you again, again Beachcomber.

If the capital gain has to be paid 3 month after the 3% is paid, it seems correct that it should have been paid in August, as we were told by the gestor.

That is exactly, what we are worried about.

But just now we have been discussing, if it perhaps has something to do with that our account suddenly has been blocked. We wrote to Unicaja to ask why, and they told us that they need a documentation for our income. We could tell that they got it in March after they have blocked the account at that time. So today we got an excuse. But it might be that it was'nt possible to take the capital gain from our account in August, if it was blocked. We will write to the bank and ask them.

Concerning section H in formular 210 both colums are completed - box 9- 12 and 13-17. Box 17 are the result of 12 + 16. But I had to say that I'm still unsecure if everything is done in the right way. I must try to study it again. Cannot quiete understand what you tell about a 100 % deduction,

Linne

Beachcomber
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Re: when to pay Capital gain

Postby Beachcomber » Fri Oct 07, 2016 10:22 pm

The reduction applies to your ownership of the property prior to 1996. You owned the plot for sixteen years prior to to 1996 so you are entitled to a 100% reduction in the capital gains tax for this period. See page 10 of this document:

http://www.agenciatributaria.es/static_ ... _es_es.pdf

or in English on page 9 of this one:

http://www.agenciatributaria.es/static_ ... _en_gb.pdf

Regarding the amounts in section H you can check if the figures are correct by applying the percentages as I have stated in previous posts. If you do not understand I will post again with examples.

I am not sure about the blocking of accounts but I think that direct debits are still paid from an account even if you are blocked from using it yourself.

If there is any problem with the payment of the tax it will probably be several months before AEAT takes any action on it. These things do not happen very quickly.

linne
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Joined: Sun Jun 02, 2013 5:41 pm

Re: when to pay Capital gain

Postby linne » Sat Oct 08, 2016 8:40 pm

Hi again, Beachcomber.

Concerning the figures in Form 210; The capital gain is calculated with 19% of the result in box 17 .

Concerning the link you send: I have read page 9 and can see, that we should have a reduction - as you have told, and the gestor also spoke about,when we wisited her in March.

Concerning the figures the gestor have send us, I have once again tried to control them but have to give up. I simply cannot figure out the calculations. It seems, as if we have to pay 29,52% of an amount, I don't know what is . Perhaps we cannot have a reduction for the house but only for the land (had the deed in 1981). We didn't get Obra Nueva before in 2009.

Concerning the blocking of our account we also think that a direct debit will be paid. But the first time it was blocked the lawyer was not able to put money INTO our account, so who knows. We will write to the bank.

We will try to contact the gestor once again. With your help I now know more about capital gain, so it's easier to ask questions. Hopefully she will help us even though she is busy.

So once again thank you for taking time to help us,

Linne

Beachcomber
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Re: when to pay Capital gain

Postby Beachcomber » Sat Oct 08, 2016 8:53 pm

OK, please ask again if you need any more help.


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