3% retention tax

Information and questions about the Law in Spain and Andalucia.
Miro
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Re: 3% retention tax

Postby Miro » Sun Oct 22, 2017 3:13 pm

No idea what AlcalaB posted as it's since been edited, but it seems Beachcomber has kindly confirmed what I've been saying all along. Not sure what's so difficult to understand?
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Nimrod
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Re: 3% retention tax

Postby Nimrod » Sat Oct 28, 2017 12:43 pm

Just as a matter of interest ,if anyone is wondering how long repayment takes,I sold my property in early March and the Spanish government have reimbursed the balance of my 3% retention today.
So from the day of sale completion to repayment it was a little shy of 8 months.

Miro
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Re: 3% retention tax

Postby Miro » Sat Oct 28, 2017 1:04 pm

Good to know, thanks. I've heard that if they don't pay within 6 months, they're supposed to pay interest - obviously they don't, but has anyone else heard that?
Don't worry about what people think, they don't do it very often

"Acquiring a dog may be the only opportunity a human ever has to choose a relative," Mordecai Siegal 1935-2010.

bernipops3
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Re: 3% retention tax

Postby bernipops3 » Sun Oct 29, 2017 9:00 am

Our solicitor told us this as well. However, we would be happy just to get our 3% back as we sold our house a year ago yesterday.

Miro
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Re: 3% retention tax

Postby Miro » Sun Oct 29, 2017 11:11 am

So, was it 8 months, or a year? Bit confused....

Oh, sorry, just realised that's two different members! :oops:
I wonder why there's no consistency with these repayments?
Don't worry about what people think, they don't do it very often

"Acquiring a dog may be the only opportunity a human ever has to choose a relative," Mordecai Siegal 1935-2010.

Beachcomber
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Re: 3% retention tax

Postby Beachcomber » Sun Oct 29, 2017 3:17 pm

There is a consistency. The retention is virtually always repaid within the six months period allowed. If AEAT does not meet this deadline and the 210 was properly completed they will pay interest.

However, if there was any kind of error on the form it will be necessary to rectify the problem and the six month period will start again once the form has been re-submitted correctly.

Some of the reasons for non-payment of which I have personal knowledge are as follows:

Annual non-resident taxes have not been paid.

The difference between the actual sale or purchase price and the revised values are outside of certain parameters. (In this case it will be necessary to produce all receipts for expenses inherent to both the purchase and sale. Some tax offices insist that they are included with the declaration but not all).

A joint declaration having been made by unmarried co-owners. (They each must submit an individual declaration).

The bank account given for the payment was incorrect or does not exist.

The lawyer did not even submit a declaration.

The lawyer submitted a declaration and received the refund into his own bank account by way of power of attorney but has not passed it on to the client.

There is now no necessity to allow a lawyer to have the funds paid into his own bank account as AEAT now has the facility to make the necessary transfer to a bank account in a foreign country albeit at a very poor exchange rate (in the case of a country outside of the Eurozone) and high bank charges for the transfer.

The onus is on the claimant to make the necessary inquiries into any non-payment of the retention. It is highly unlikely that AEAT will contact the claimant preferring to work on the assumption that he/she will lack the inclination and/or wherewithal to inquire into the non-payment, especially if they have sold up and returned to the UK, and the funds will go into the government coffers.

If the submission of the CGT declaration and reclaim of the retention is carried out by a third party on behalf of the sellers it is important that they (the sellers) insist on being given a copy of the form 210 upon which the declaration was made. This form must be produced when making any inquiry into the reason for non payment of the refund.

bernipops3
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Re: 3% retention tax

Postby bernipops3 » Sun Oct 29, 2017 4:05 pm

Beachcomber thanks so much for the detailed response.

We have a copy of the 210, paid our non residents tax, etc so it looks like we will have chase AEAT up.

A bit of a cheek I know but could you possibly post the link where I can do this in English please.

Thank you so much for your help.

Kind regards
Bernipops

Miro
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Re: 3% retention tax

Postby Miro » Sun Oct 29, 2017 4:36 pm

Excellent post, thanks Beachcomber.
I wonder how long it takes on average for Hacienda to process 210s and discover any errors? :eh: Unless you keep checking with them on a regular basis, the 6 months could be up before any errors come to light, and the clock resets. Theoretically, this could then go on indefinitely, if they don't inform claimants any "errors". In my case, nearly 4 months has lapsed since lodging our 210s, and now they've requested fiscal residency certificates from the UK. These were not one of the requirements given in their own info and instructions, but does the 6 months start again now from when they receive these?
Don't worry about what people think, they don't do it very often

"Acquiring a dog may be the only opportunity a human ever has to choose a relative," Mordecai Siegal 1935-2010.

Beachcomber
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Re: 3% retention tax

Postby Beachcomber » Sun Oct 29, 2017 4:59 pm

This cannot be done online or by telephone. The enquiry has to be made in person at the local tax office.

The clock will start again once any necessary documentation has been submitted. The question of fiscal residency only comes into the equation when the claimant has previously been a fiscal resident of Spain.

Claimants who have been fiscal non-residents throughout their period of ownership of the property as evidenced by their regular submission of annual non-resident income tax returns should not have to produce proof of fiscal residency as they will have declared it on each of their non-resident tax returns.

Miro
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Re: 3% retention tax

Postby Miro » Sun Oct 29, 2017 5:06 pm

Beachcomber wrote:The clock will start again once any necessary documentation has been submitted.


That's what I'm worried about now. Theoretically, this can go on forever, as they keep coming up with additional requirements every 5 months or so. I understand the requirement for former residents - but then why is it not mentioned in their instructions? Can they really just make it up as they go along? (Retorical)
Don't worry about what people think, they don't do it very often

"Acquiring a dog may be the only opportunity a human ever has to choose a relative," Mordecai Siegal 1935-2010.

Beachcomber
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Re: 3% retention tax

Postby Beachcomber » Sun Oct 29, 2017 5:19 pm

As far as I can make out they only have one 'free shot' within which they must make all of their requirements and objections known so, theoretically at least, it should not be able to go on for ever. In the cases of reclamations of which I have personal knowledge I can say that probably over 90% of claims for repayment of some or all of the retention have been settled, in full and without question, within the six month period.

bernipops3
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Re: 3% retention tax

Postby bernipops3 » Sun Oct 29, 2017 5:21 pm

Beachcomber wrote:This cannot be done online or by telephone. The enquiry has to be made in person at the local tax office.

The clock will start again once any necessary documentation has been submitted. The question of fiscal residency only comes into the equation when the claimant has previously been a fiscal resident of Spain.

Claimants who have been fiscal non-residents throughout their period of ownership of the property as evidenced by their regular submission of annual non-resident income tax returns should not have to produce proof of fiscal residency as they will have declared it on each of their non-resident tax returns.


I am guessing this may be the problem with us as we were fiscal residents until 2014 when we changed to non fiscal. I will have to get our solicitor to take this up with the tax office. I bet by the time this is sorted the refund won't be worth having.

Thanks again for your input Beachcomber it is most appreciated.

Miro
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Re: 3% retention tax

Postby Miro » Sun Oct 29, 2017 5:24 pm

bernipops3 wrote:
Thanks again for your input Beachcomber it is most appreciated.


Ditto :thumbup:
Don't worry about what people think, they don't do it very often

"Acquiring a dog may be the only opportunity a human ever has to choose a relative," Mordecai Siegal 1935-2010.

Nimrod
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Re: 3% retention tax

Postby Nimrod » Mon Oct 30, 2017 4:25 pm

All our documentation was correct,we had notification of how much they were going to steal within days but it still took 8 months to pay me back.
Still,I'm happy and just thankful I got paid out at all.
Got one last trip in the New Year to close 2 bank accounts down in person (I don't trust them to do it remotely),get the proceeds in cash ,have a short break,
and wave goodbye.


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