Renta 2017

Information and questions about the Law in Spain and Andalucia.
El Cid
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Re: Renta 2017

Postby El Cid » Sat Apr 07, 2018 11:36 am

It is exempt from direct taxation, BUT it is added into the complicated equation that calculates the tax rate to be applied to any other income. If you have a reasonably high "normal" income and a high exempt income it can make a very significant difference.

Even if you did not have to pay any tax on a small income, under the old rules, of say 10k, if the exempt pension was 20k, that could result in an increase of nearly €1000 in your tax bill. It is affected by other things such as age etc but there is no easy way of calculating it apart from running the tax program to see what happens.

This year there seems to be some sort of tax simulator on the Renta website which could be useful. I havent tried it yet as I never look at my tax until June.

Sid

AkoAko
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Re: Renta 2017

Postby AkoAko » Sat Apr 07, 2018 2:48 pm

Finally got to submit mine and wifes Web Renta , only problem is were linked with each other in that i can log of for either of us and viewed and modified some of the figures but they show us as both being single . Last year we were shown correct as being married to each other . There has to be an option on the site to change that but cant find it .

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gerryh
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Re: Renta 2017

Postby gerryh » Sat Apr 07, 2018 3:46 pm

It's on page 1.02 if you start a new declaration.
Can't find the option to change it on an existing declaration.
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Re: Renta 2017

Postby AkoAko » Sat Apr 07, 2018 5:37 pm

Thanks Gerryh , looks like i will have to wait for next year to change it then , already submitted our joint one for this year . On the PDF copy i downloaded it shows Declerante and Conyuge which is correct if that means wife however it might mean partner so i guess in that case we could both be single.

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peteroldracer
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Re: Renta 2017

Postby peteroldracer » Wed Apr 11, 2018 3:07 pm

The FAQ guide says “These figures apply to the income of the family unit.”
Is there a definition of what a family unit is? We are not married, but do have a Certificado de conjugue and are one of each gender. Does the state regard us as a couple for tax purposes, or two separate people who happen to have joint property and bank account?
There seems a contradiction between not being necessary to submit a return if income is less than €xxxxxx yet the threat of a fine for not submitting. In practice, does this mean that once you have made a return you must do so every year?
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AkoAko
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Re: Renta 2017

Postby AkoAko » Thu Apr 12, 2018 9:48 am

gerryh wrote:It's on page 1.02 if you start a new declaration.
Can't find the option to change it on an existing declaration.
Cheers
Gerry


I have looked at the new return that a friend is about to fill in to find 1.02 but i dont see how to select pages but the one that came up did have the facility to change personal details at the start which i think is where you were directing me however the number at the top of the box is 1.23 , if this is wrong can you tell me how to find a particular page . Many thanks in advance .

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gerryh
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Re: Renta 2017

Postby gerryh » Thu Apr 12, 2018 10:55 am

Just had another look.
The site has been updated. The page number has changed to 1.04
On this page you can select whether you are single, married, widowed or divorced.
If you select married then, as you fill in financial details on later pages, you can swap between yourself or your wife.
When completed the summary shows how much tax is owed as a couple or as individuals so you can select which is the lowest. In fact it tells you which is the most advantageous.
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Gerry
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Re: Renta 2017

Postby AkoAko » Thu Apr 12, 2018 11:04 am

But how do you find a particular page . I cant see an option other than when i went through the return before submitting using the player type buttons and ours only has 52 pages .
Last edited by AkoAko on Thu Apr 12, 2018 11:10 am, edited 1 time in total.

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peteroldracer
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Re: Renta 2017

Postby peteroldracer » Thu Apr 12, 2018 11:07 am

“you can select whether you are single, married, widowed or divorced“
As I asked above, does anyone know how an unmarried couple (but with a certificate of conjuge) must be treated? As Spanish couples do not have the same name would Hacienda query the status?
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gerryh
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Re: Renta 2017

Postby gerryh » Thu Apr 12, 2018 11:14 am

Are you saying that after filling in the declaration you now want to go back and have a look at a particular page?
If so, then click on the "Ver datos trasladados " button and this then gives you a page selection option.
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Gerry
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El Cid
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Re: Renta 2017

Postby El Cid » Thu Apr 12, 2018 11:21 am


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fyfin
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Re: Renta 2017

Postby fyfin » Fri Apr 13, 2018 2:46 pm

On annuities it should be noted that not all are treated as "renta vitalicas" so subject to reduced taxation. My previous accountant (and I know I could do it myself but previously it was a little complicated) put my annuities in box 27 which was indeed very helpful. Unfortunately the business changed hands and someone, without my knowledge, asked the local tax office for clarification. They, not knowing what to do themselves, told her to put them all in box 1 which she did of course, so all taxed as income with no deduction. I protested, naturally, so the tax office demanded contracts proving that I had purchased these annuities with my own cash and not via a pension scheme etc. I could prove this on one policy as it was an immediate life annuity and purchased via a tax free lump sum but not for the rest. The rest are now being taxed as income and I have to consider myself lucky that the previous 3 years have not been investigated otherwise I could well be fined and asked to pay the additional tax.

If I had been doing my own returns, I could have carried on in ignorance and I doubt if the Hacienda would have ever twigged or even bothered. Let's face it there's a lot of other tax dodgers they could pursue.

On a totally different note, my wife likes to play online bingo and had a rather large win (a few thousand) using an account she created for me (I can't stand the game). I assumed, wrongly, that it would be taxed at the same basic rate as lottery winnings but NO - also treated as income so more tax than ever to pay. But, I always remember from my working days, when someone complained about paying too much tax, the boss would say, "well you must have earned it to pay it".
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El Cid
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Re: Renta 2017

Postby El Cid » Fri Apr 13, 2018 4:20 pm

Annuities also seem to be a problem with some gestors who don’t seem to understand the situation, which is odd as they are fairly common in Spain. You were lucky to find one that did understand.

I have posted before about the fact that the people in the tax office have very limited understanding of tax in relation to foreigners, most recently about the changes regarding Crown pensions. I guess we have all heard about the recent changes where you now have to declare them as exempt income which can affect the overall tax you pay. The law has not actually changed, you were ALWAYS obliged to declare them but there was some confusion at the tax offices, some did, some didn’t. Then, allegedly, some senior man in Madrid said (incorrectly) that they were to be ignored. From then on that became the norm. The new Tax treaty did not actually change anything except clarifying that they should be declared.

On the basis that tax officials (like many government employees in Spain) are too lazy to argue about your declaration unless they are face to face with you, the best and very easy solution is to do it yourself online when you can sit back, with 99% confidence that it will be accepted.

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AkoAko
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Re: Renta 2017

Postby AkoAko » Fri Apr 13, 2018 6:25 pm

" the tax office demanded contracts proving that I had purchased these annuities with my own cash and not via a pension scheme etc. I could prove this on one policy as it was an immediate life annuity and purchased via a tax free lump sum but not for the rest."

So would i be correct in thinking that a one off payment to buy a private pension policy 25 years ago that i used to buy a pension when i was 60 should be included as earned income and entered in box 1 along with my state pension . If i had paid a cash sum to buy the annuity then it should be entered in box 27 and would be treated differently and i would be paying less tax on it .

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fyfin
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Re: Renta 2017

Postby fyfin » Fri Apr 13, 2018 6:55 pm

Probably not I would think although my way of thinking now is to take a chance and if queried argue your case. I think they only go back 4 years in any case. My reason for saying probably not is that I don't think it satisfies the criteria of what they call "renta vitalica" where you use a lump sum to buy an annuity. Then the reason for treating it favourably (and also in UK) is that essentially you are receiving a nominal interest plus some of your own capital back so you don't get taxed on the part considered to be your own money coming back. At least that's my understanding.
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AkoAko
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Re: Renta 2017

Postby AkoAko » Fri Apr 13, 2018 7:03 pm

O well i added my private pension to my state pension and put the total in box 001 and it would have been amonst the amount tax would be due on so i think i took the safe option , they cant accuse me of trying to fiddle anything , if i had used box 027 for the private pension they might have .

El Cid
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Re: Renta 2017

Postby El Cid » Fri Apr 13, 2018 7:30 pm

I would treat it as an annuity. You were free to do what you liked with the lump sum and you chose to buy an annuity - you could have spent it on a car!

The reason you get special tax relief on annuities is because most of the payment comprises your own contribution to the fund so you cannot pay tax on money that has been taxed originally as income.

Just declare it as an annuity and lie back and enjoy the increased net return. Just remember that we talking about a HUGE reduction in the tax you will pay.

Sid

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fyfin
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Re: Renta 2017

Postby fyfin » Fri Apr 13, 2018 8:16 pm

But he bought it 25 years ago. I think they refer to them as immediate life annuities. But as you say I would be inclined to take a chance so long as the word annuity features somewhere onbthe policy
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AkoAko
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Re: Renta 2017

Postby AkoAko » Fri Apr 13, 2018 8:34 pm

Friend started business in 1985 selling financial products so i paid out £400 as a fully pain up policy , 25 years later pension pots was worth £8500 so took 25% lump sum £2000+ and £450 a year , so far had over £5000 back and it caries on for the wife who is only 55 now so think i did ok , bit of Spanish tax wont be missed .

AkoAko
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Re: Renta 2017

Postby AkoAko » Thu Apr 26, 2018 11:49 am

Just came across an anomaly on the Renta for a friend . The guy has a contract for 4 hours a week , every year for the last 5 years he has gone online and accepted the Renta and received a small refund . His income is always filled in by Hasienda in box 0001 , allowances , bank interest and retention are also shown . Today he logged on thinking he would again just accept the calculations This year he was surprised to see there is nothing filled in other than his personel allowance of €5500 , no income , no tax retention , there is a retention shown on another page for Almonds sold which shows a small retention , even that retention isn't shown on the Renta , his personal details are all correct though .

My friend now has his Nominals and it shows his earnings for each of the 12 months and on some a small tax deduction however the question is why is none of that shown on the Renta . He cant remember if when he logged on he pressed NEW rather than continue with previous one . If he did would he have been presented with a blank return and can now only amend the new one and everything that should have been on the original is now lost .

Any help would be very much appreciated as for other reasons he has to a return each year now and hes concerned as he cant submit his Renta as it stands showing no income as its clearly wrong .


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