Entitlement to claim back 3% Tax Withheld

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Stoker
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Entitlement to claim back 3% Tax Withheld

Postby Stoker » Mon Mar 13, 2017 3:18 pm

A friend of mine has recently sold his apartment which he bought in 1977. He has been told that he would be entitled to claim back the 3% tax that was withheld and paid to the Spanish Tax authorities. I see from the FAQ that he should use Modelo 210 to make the claim unfortunately there is no detail as to what should be filled in in his particular circumstances (I realise that the FAQ could not possibly cover all circumstances that arise). We've had a look at the notes associated with the Modelo 210 but it all seems a bit complicated. Can anyone advise us in the first instance whether or not he would be entitled to claim the money back and if so point us in the direction of any instructions in English as to how to fill in the Modelo 210 form.

Many Thanks

Beachcomber
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Re: Entitlement to claim back 3% Tax Withheld

Postby Beachcomber » Mon Mar 13, 2017 5:08 pm

The retention can be reclaimed but only if non-resident income-tax has been paid for at least the past five years.

The instructions on the AEAT web site are also available in English:

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

Completing the form is not difficult but the calculation is a little more complicated due to the length of time the property has been owned.

This thread may be of help:

viewtopic.php?f=41&t=36636&p=360382

Stoker
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Re: Entitlement to claim back 3% Tax Withheld

Postby Stoker » Mon Mar 13, 2017 5:12 pm

Many Thanks Beachcomber

I'll follow up those links.

My friend has paid his non-residents tax every year.

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Re: Entitlement to claim back 3% Tax Withheld

Postby Beachcomber » Mon Mar 13, 2017 6:13 pm

As the purchase of the property took place in 1977 the calculation would be fairly complicated and you will need to get your head around this calculation:

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 the property was purchased in 1977 the reduction for this period would be 100%.

There is an example in the AEAT link which I gave you.

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Re: Entitlement to claim back 3% Tax Withheld

Postby Stoker » Mon Mar 13, 2017 6:37 pm

Hi Beachcomber

I've had a look through those documents and the 210 form. There is a lot of information to be digested. Since he would be entitled to 100% reduction would I be right in thinking that as well as filling in all the other basic fields that he would put:-

1. the sale price in box 9

2. the purchase price in box 10 - this would have to be converted from pesetas to euros

3. the difference between boxes 9 and 10 in box 11

4. zeroes in boxes 12 and 17 (as he is entitled to 100% reduction).

5. the amount to be refunded in box 29 i.e. the amount paid on the 211 form.

and that there is no need to show how he arrived at the 100% reduction?

Many thanks again for your help.

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Re: Entitlement to claim back 3% Tax Withheld

Postby Beachcomber » Mon Mar 13, 2017 10:51 pm

This is a self-declaration and there is no requirement to justify the figures shown on the form at the time of submission but if the declaration is inspected and challenged the calculations must then be produced in order to contradict any amended figure proposed by AEAT.

Boxes 9 and 10 show the actualised sale and original purchase prices respectively and the difference in Box 11 as you say but be aware that the 100% reduction only applies to the period of ownership up until the 31st December 1996. In order to achieve the final figure the normal CGT calculation has to be made then the figure obtained by applying the coefficients is deducted and 19% applied to the result.

This is difficult to explain in words but if you have any doubt I will try again in a different way.

I assume there has been no escritura of inheritance or obra nueva along the way. In this case the calculations have to be made to take this into account.

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Re: Entitlement to claim back 3% Tax Withheld

Postby Stoker » Mon Mar 13, 2017 11:04 pm

Thanks Beachcomber

We'll have to let what you have said sink in. It's obviously not just as simple as I have stated.

As far as I know there has been no escritura of inheritance or obra nueva.

We really appreciate your help.

Many Thanks

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Re: Entitlement to claim back 3% Tax Withheld

Postby Beachcomber » Mon Mar 13, 2017 11:25 pm

Once you have attempted the calculations, if you would like me to double check let me have the result plus the actualised sale and purchase prices and dates of both (by PM if you wish) and I will also do the calculation and see if we reach the same result. Just the figures and dates will suffice, no personal information required.

Given that the property was originally purchased in 1977 it is unlikely that there will not be a capital gain. It may be a case of trying to mitigate the amount of tax due rather than claiming a refund.

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Re: Entitlement to claim back 3% Tax Withheld

Postby chrissiehope » Mon Mar 13, 2017 11:58 pm

If an escritura has been drawn up because ownership has partly changed due to death of one of the joint owners, is that what you mean by an escritura of inheritance ? And if there's an obra nueva one from a few years back, is that a double whammy ? Not that anything is sold yet :-(
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Re: Entitlement to claim back 3% Tax Withheld

Postby Beachcomber » Tue Mar 14, 2017 8:40 am

Yes, but although it makes the calculations rather more complicated it does go a long way towards reducing the capital gain.

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chrissiehope
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Re: Entitlement to claim back 3% Tax Withheld

Postby chrissiehope » Tue Mar 14, 2017 2:12 pm

Every cloud ..... ;-) !
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Outside of a dog, a book is a man's best friend.
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Re: Entitlement to claim back 3% Tax Withheld

Postby Stoker » Wed Mar 15, 2017 9:19 pm

Beachcomber wrote:Once you have attempted the calculations, if you would like me to double check let me have the result plus the actualised sale and purchase prices and dates of both (by PM if you wish) and I will also do the calculation and see if we reach the same result. Just the figures and dates will suffice, no personal information required.

Given that the property was originally purchased in 1977 it is unlikely that there will not be a capital gain. It may be a case of trying to mitigate the amount of tax due rather than claiming a refund.

Hi Beachcomber

Many thanks for your kind offer and apologies for not replying sooner - I don't seem to be getting notifications of replies to this thread although I am subscribed to it.

I am on holiday in Spain at the moment and my friend is at home so I won't get speaking to him to get the exact figures and dates for the calculation until after 23rd March. As soon as I have all the info I'll update this thread with the information that you are looking for.

Again many thanks for your help.


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