News
December 2009 Newsletter
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SPANISH SOLUTIONS Legal &Tax Firm Newsletter December 2009/ issue 4 |
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In this issue:� Latest news- what´s on over Christmas? |
The Spanish Solutions team would like to wish you all a very Merry Christmas and happy, healthy and Prosperous New Year! The office will be closed from 24th December 2009 until 4th January 2010. |
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LATEST NEWS – WHAT´S ON OVER CHRISTMAS?
Torrevieja Three Kings parade / Epifanía del señor January 5th 2010
This evening is also known as the 12th night or Epifania del señor (epiphany) or Reyes Magos (Three Wise Men, Three Kings or Three Magicians). The tale of the birth of Jesus says that 3 wise men (Melchior, Casper and Balthazar) took gifts to Jesus, and in celebration of this event, the Spanish, traditionally, also give and receive presents. At the end of the procession the three wise men hand out gifts to the children.
ARE YOU DUE A TAX REFUND? Some good news lately has been that the European Court of Justice ruled that the Spanish government illegally over charged non Spanish residents Capital Gains Tax from 1997 until December 2006. The ruling means possible refunds to any EU citizen who sold a property in Spain between December 2005 and December 2006 (as it is only possible to claim back four years), whether they paid the full 35% CGT or only the 5% withholding tax (which is now 3%). However you must have submitted wealth tax returns in Spain on time to be able to claim. If you would like to discuss attempting a possible claim, please contact Amanda on sales@spanishsolutions.net. PENSIONS Talking recently to Chris Turton of VFS (a fully regulated independent financial adviser), he suggested that if people have one or more UK pensions, it is wise to have them analysed in light of the 2008/9 financial crisis. As we know, many UK schemes are in serious financial difficulty and it may be a good time to make the choice to move. Also, many pensions allow access to some of the fund which may be of benefit for helping out in difficult times or to use as a business investment. Corporate schemes have their benefits, but they generally have fixed retirement ages, typically 60 or 65, whereas personal arrangements are generally more flexible, usually 50 to 75. Many people have a number of small schemes and a mixture of corporate and private from their UK employment history and can consider "rolling" them into one plan. If you reside in Spain, you could consider transferring them into "Qualifying Recognised Overseas Pension Schemes" (a type of pension approved by the UK HMRC for non residents), but it is apparently not appropriate for everybody. If you would like to discuss this matter, please contact Amanda and she will arrange an appointment with Chris Turton. and finally…We would like to wish our new neighbours and clients all the best for the coming year; especially Sandra at La Zenia Fish and Chips, and Louise at Lyndyloo Bridal. We have just helped sponsor VICTA (a charity that provides support for families with blind and partially sighted children www.victa.org.uk). Editor: Amanda Thomas, Spanish Solutions sales@spanishsolutions.net 00 34 966761741 Visit us online at: www.spanishsolutions.net Based at La Zenia, OrihuelaCosta. |
BENEFITS OF BECOMING TAX RESIDENT IN SPAIN Many people seem to think it is best to avoid paying taxes in Spain or becoming tax resident, but it is so important to get it right. People often do not get into the system because they don´t realize that they have to pay tax in Spain and that it can affect them if they don´t even make a nil return. They don´t know how to register and what tax they should pay, as it is very confusing. However, if someone spends more than 183 days per year in Spain they are obliged to register as a tax resident here and declare their worldwide income and assets. They can also become tax resident if the main base of their professional activities is here and unless proved otherwise, they are presumed Spanish resident if their spouse lives in Spain and they are not legally separated. Even if someone arrived two or three years ago and did not register for tax or are behind with their returns, it should be done as soon as possible as the authorities are often more sympathetic with people who bring their situation up to date. It´s not all bad. There are benefits to being a tax resident in Spain. In the Valencia region, the inheritance tax rate is minimal between resident spouses & close relatives (you should also be registered on the Padron), whereas if you remain UK or Irish domiciled you will be liable for UK or Irish inheritance tax on your worldwide assets, as well as being liable for Spanish succession tax. Tax residents over 65 can also be eligible for significant capital gains tax relief on the sale of their main home in Spain, whereas non residents currently pay 18% capital gains tax. The benefits of being a resident only apply though when tax returns have been submitted and the necessary taxes paid. It is not sufficient to have a residencia card or green certificate. Many people are finding that even though they are resident, capital gains tax is being withheld on their sale proceeds, until they can prove it, as they had not made any tax returns. The common mistake is the assumption that a tax return isn´t needed because people understand that they are below the tax threshold in Spain and/or their pensions are taxed in the UK or Ireland. Even so, tax returns should be made, as a nil return, in order to demonstrate being a tax resident in Spain. It doesn´t mean that pensions in the home country will be taxed twice. If you need any assistance with your tax or wish to discuss this please contact Poli on info@spanishsolutions.net NEW TRAFFIC REGULATIONS New traffic regulations came into force in Spain in late November which reduce the number of offences that can lead to a driver losing points on a licence. Seven offences have been removed from the list of points related offences, although they still bear a fine. These include driving without lights, parking in a bus lane and driving with twice or more the number of permitted occupants. Good news for drivers. Don´t forget that SPANISH SOLUTIONS can assist with transfers onto Spanish plates, new Spanish licences and transfers of ownership. Contact Lynne or Amanda. The team : Poli Borisova, Ana Maria Barbadora Fernández, Eva G. Gilmartin, Lynne Henderson, Yvonne Hollywood, Yolanda Villa Piñero, Silvia Sanchez, Amanda Thomas, Susana Garcia Vega. With Pedro Molina Lopez and Fidel Ramírez Marín. Full members of TIBA www.tibacb.com
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Copyright 2009 Spanish Solutions
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