Category Archives: Legal Info Tenerife – Spain

Tax and UK Pensions

I am frequently asked about tax on UK pensions, questions along the lines of whether residents should be paying tax here on UK pensions, both state and occupational pensions where providers deduct any tax necessary at source. People ask if they should be filling in tax returns here as well, and whether that actually means they’ll be paying tax twice. Mostly, they ask for easy-to-understand information in English.

As I’ve said before, I’m not able to answer tax questions, because I’m neither informed nor qualified, but I know a man who is! Given the number of times I’m asked these sorts of questions, I’ve now asked for clarification from Paul Montagueof Blevins Franks, and as usual he has come up trumps. I’m very grateful to him for the following answer, and recommend him for any further assistance anyone requires.

If an individual is a tax resident in Spain, or a de-facto tax resident meaning that they are living here but not making a declaration of any kind (and these are being hunted as we speak), then under normal circumstances they have an obligation to declare their total incomes received from anywhere in the world on a yearly tax return here in Spain. This return should be made sometime from the 1st of May and before the end of June and refer to income(s) received from the previous tax year; which is a calendar year here in Spain. State pensions, company pensions and private pension fund/SIPP payments should be included.

When you make your first tax return in Spain, you will be met with a tax bill which you obviously have to pay. So for a period, you are/have actually paid taxes on the same income in both the UK and Spain but be assured that this can be dealt with. As follows…when you pay your Spanish taxes for the first time, your accountant can then ask the Hacienda (the Spanish tax office) to provide a tax certificate which is written in both Spanish and English and clearly states that from a certain date, you are a tax resident in Spain. This certificate should be included with THIS form (also available HERE), completed and sent to the tax office – address included on the front page of this form. The individual would then receive a return of tax paid (from the HMRC) when he or she became tax resident in Spain and there would be no future tax collections taken from your UK sourced income.

It sounds messy but is quite a simple affair which usually takes about 6 weeks to complete. I would advise that everyone makes a return even if this would be a nil return as you would benefit from this for example, you would not have to pay the non-resident tax on your main home in Tenerife or importantly, your main home could avoid succession taxes on death if certain criteria is met. Be aware that you do not have a choice where you pay your taxes.

Follow Link : – Info Supplied Janet Anscombe


Horizontal Division… Rights and Duties

Local 14

By Mariano E. Zunino Siri

WHEN you buy an apartment or unit which is part of a complex, you are also buying a quota or percentage of the whole site.

You are buying a property that belongs to a Horizontal Division, and every owner has the right to use the common areas, and is obligated to contribute to the maintenance of these areas, according to his percentage.

This is regulated by the Horizontal Division Law (or Horizontal Division Act). The Law says:

“An assessment quota shall be allocated to every unit in relation to the value of the building and expressed as a percentage of said value. 

“Said quota shall serve as a coefficient to determine individual unit shares in the expenses and benefits of the community…”

And also: “Individual unit owners can freely dispose of their estate, provided constituent elements are not separated and transferred enjoyment does not affect the obligations arising out of this ownership system.”

When the developer builds a complex, he normally grants a Deed of New Work, stating that on the plot there will be a development (once the municipal licence or building licence is granted).

If the development is divided into different units, then the Deed may also include a Horizontal Division.

The developer later sells units to different buyers, which means that instead of one owner, there will be many of them composing the community of owners (comunidad de propietarios).

According to the Law: “The declaration of ownership of individual units in a multiple-unit building (“Deed of Horizontal Division” or “Título Constitutivo”) will describe each unit, in addition to the building as a whole, and each unit shall be correlatively numbered including its size, boundaries, floor where it is located and such appurtenances as garage space, attic or basement. The same document will establish the assessment quota corresponding to each unit as stated, either by the sole owner of the building at the time sale of units was initiated or by agreement of all existing unit owners…”

There would be two types of rights of the owners: full ownership on the unit bought (apartment) and participation within the common areas (stairs, lifts, alleys, gardens) and the contribution to their maintenance (obligation). The full ownership right has limits, as the Law says:

“Owners of individual units may modify the architect elements, installations or services of their unit, notifying the community representative provided such work does not alter the safety of the building, its overall structure, its external appearance or condition, or prejudice the rights of another unit owner.”

Summarising: owners of an apartment have the right to use their property freely, vote in the Annual General Meeting of the community of owners and use the common areas.

But, at the same time, they have duties. Among them is the contribution to the maintenance of the common areas (periodical payment fee to the community of owners) and the respect of such common areas.

The rules of the community of owners are regulated by its Statutes and the Law, which includes not only the rights and obligations of the owners but also the way to govern the community: President, Vice-President, Secretary, Administrator.

But this exceeds the contents of this article. In future columns, I will return to this matter.


Article From Canadian Weekly

Tenerife New Rental Law

11.05.2014 – High unemployment rates and the difficulty of getting house purchase finance means that fewer and fewer Spanish residents can choose to buy a property.  However there are over three and a half million empty homes in Spain, 15 per cent of the housing pool according to the census on population and housing which has just been published by the Spanish Statistics Institute.

Over 30 per cent of European citizens live in rented accommodation, but in Spain, up to now, that figure stands at just 17 per cent, the lowest figure in Europe.

The law which came into force last year to develop the housing rental market and make it more flexible has introduced a number of legal and taxation changes.

Previously the rent could only rise by the inflation rate, now from the third year onwards; the amount of increase can be agreed freely between tenant and landlord.  The minimum five year contract has been reduced to three years and the minimum contract with extension from eight to four – giving more flexibility to those who are thinking of selling when the market improves and thus don’t want to commit to a long rental contract.  The landlord can also reclaim the property after the first year for his or her own use, for parents or children’s use or for a partner after a divorce decree.  All it needs is a registered letter giving a firm date and at least two months notice.

The law now allows the tenant to leave a property after six months, giving just one month’s notice.  However in practice, this is what they have often done anyway as taking them to court to claim compensation is too costly.

New rental contracts must be registered at the land registry.  This protects the tenants from the property being sold out from under their feet.  However, if the owner has the property claimed by a finance company or similar through a court action or similar and the property is auctioned off, all the tenants rights are lost.

The process from evicting non-paying tenants has been speeded up.  The eviction process can be requested even if the tenant has only missed one month.  If the amount is not paid, the process for eviction is a lot faster and could be resolved in three months.  There is now a register on unpaid rents.  If you are thinking about renting out a property to a particular individual, you would be wise to consult it.  Often these kind of debtors are habitual offenders.

Landlord and tenant can now agree to cancel the tenants’ right to first purchase of the property if it is put up for sale.  They can also come to an agreement for a reduction in the monthly rent in exchange for improvements to the property.

All properties must have an energy efficiency certificate.  Landlords caught renting without providing this, face fines of between €300 and €6,000.

It is believed that more properties will come on the market as a result of these measures and that therefore prices will fall.  However, those landlords who have already been bitten by poor-payers who have left their properties trashed and with many items stolen or broken after months of trying to get them out may well be very hard to convince – and even less so at even lower rates of return.