Reporting of Assets Outside Spain and UK Rental Income.

 I remember the pensions nightmare going through my divorce 7 years ago."Defined benefit" versus "defined contribution". Real time valuation. It took a year to get a correct figure. Good luck.

Juan

How is that value obtained?

"..the lawyer who gave a presentation I went to the other day, said one can do the declaration on line and then (if the don't have 'digital signature' ) can download it and send / take it to Hacinda.,  Most present were surprised."

Me too. As far as I was aware, without the digital signature you can't even access the online forms. And there is absolutely no doubt, the completed forms can only be submitted online. Where would you send it anyway? My local Hacienda office is completely unaware of this form and can't tell you anything about it!

My understanding so far on pensions: it is the capitalized value of the annuity (in payment) which is used, as calculated for the existing wealth tax rules. This is different from the transfer value of the pot at the time you bought the annuity. Ask your gestor how it works. If you have not yet bought an annuity, you do not need to declare the value of the pot (which is an easy figure to obtain from your pension company if you really want to know) since you have no control over it and derive no income from it. At least, that's how I understand it at the moment. There are mixed opinions and conflicting advice (how surprising) about defined benefits pensions, but at the moment I'm erring towards the camp which claims these do not have to be declared, since technically you have not bought a pension with capital and it therefore has no asset value to you - although obviously you do receive an income which should be declared (and taxed if appropriate) on your income tax declaration. This is how Blevins Franks are interpretting it too.

 Camposol, it is really very complex. I am surprised Blevin Franks could give such an easy answer.

A pension fund exists in many forms. Examples:

1) Personal contributions to an insurance fund (one example of defined contribution)

2) Defined benefit - part of an employment contracts based on years of service

3) Defined contribution as part of an employers scheme

4) SIPP 

There are various roles. Beneficiary, Adminstrator, Trustee.

So from one extreme a local council employee is guaranteed a certain amount over their retirement index linked - very difficult to value.

Other extreme is  SIPP where one can be decision maker and beneficiary and get daily valuations if required.

The administrator is usually the one to approach via the TRustee. If you can find these. Sorry if this all sounds gobbledegoop, but it is complex.

Juan

 Roberto ask Blevins Franks to explain  a SIPP. They do not exist in Spain I suspect.

Juan

 I see that you can now access the forms here https://www2.agenciatributaria.gob.es/wcl/PFIW-M720/index.zul

Didn't know that! Actually makes it a little less daunting for some reason. I've already given all my info to my gestor (although with strict instructions not to file the return until I've double checked everything with him) Now I'm thinking I should've just done it myself. The hardest bit would probably be getting the digital signature.

 Just how complex you can get this is from Wikipedia on SIPPS

QUOTE

A Self-Invested Personal Pension (SIPP) is the name given to the type of UK government-approved personal pension scheme, which allows individuals to make their own investment decisions from the full range of investments approved by HM Revenue and Customs (HMRC).

SIPPs are a type of Personal Pension Plan. Another subset of this type of pension is the Stakeholder Pension Plan. SIPPs, in common with personal pension schemes, are tax "wrappers", allowing tax rebates on contributions in exchange for limits on accessibility. The HMRC rules allow for a greater range of investments to be held than Personal Pension Plans, notably equities and property. Rules for contributions, benefit withdrawal etc. are the same as for other personal pension schemes.

Unlike conventional personal pensions where the provider as trustee has ownership and control of the assets, in a SIPP the member may have ownership of the assets (via an individual trust) as long as the scheme administrator is a co-trustee to exercise control. In practice, most SIPPs do not work this way and simply have the provider as SIPP trustee. Sippdeal launched the first online SIPP in October 2000.

The role of the scheme administrator in this situation is to control what is happening and to ensure that the requirements for tax approval continue to be met.

The pensions industry has gravitated towards four industry terms to describe generic SIPP types:

1. Deferred. This is effectively a Personal Pension Plan in which most or all of the pension assets are generally held in insured pension funds (although some providers will offer direct access to mutual funds). Self-investment or income withdrawal activity is deferred until an indeterminate date, and this gives rise to the name. In some newer schemes of this type, there are over 1,000 fund options, so they are not as restrictive as they once were.
2. Hybrid. A scheme in which some of the assets must always be held in conventional insured pension funds, with the rest being able to be 'self-invested'. This has been a common offering from mainstream personal pension providers, who require insured funds in order to derive their product charges.
3. Pure or Full. Schemes offer unrestricted access to many allowable investment asset classes.
4. SIPP Lite or Single Investment.^[5] A recent trend towards schemes that feature much lower fees for investments that are typically placed in only one main asset. For these purposes, an investment platform or a Stockbroker / Discretionary Fund Manager account usually is classed as a single investment. An upgrade to full SIPP in the future may be allowed, depending on the scheme.

UNQUOTE

Let's see how the Hacienda work this one out and you all thought premium bonds were bad!

Saludos

Juan

 The hardest bit would probably be getting the digital signature.

Its very easy, although does mean a trip to an office like the Hacienda, I posted some detail on this weeks ago,

Its very simple to do. You can obtain one from here

http://www.cert.fnmt.es/index.php?cha=cit&sec=4&page=34&lang=en

You just enter your NIE, take your proof of identity etc to the local registration office. They will give a an electronic code, which you enter into the certificate that you can then download, and it installs on your pc. When you access the model on the Hacienda website, it checks your computer, finds the certificate, and allows you access.

I've had one for about 5 years.

  there is obviously conflicting advice on the pensions issue. Blevins Franks, one of the biggest finacial advisors says in the FAQs that only pensions arising from an annuity need be declared on the assets form. 

The reason Blevins say that is because thats exactly what the law says. 

How does one find out the value of the pension pot anyway-is it as easy as just phoning the provider?

As Roberto posted, there is a methodolgy for calculating the value, based upon the amount in payment. Its explained in ley 1/1993, article 10f

There's a very good explanation of how to work it out here

This message was last edited by KathysLad on 06/04/2013.

 Kathyslad, taken from the article you quote on Modelo 720

QUOTE

The new “defined contribution” scheme, if providing an income, could be construed to be a type of annuity but it is not clear if they have to be declared. They look like an annuity but the key point is whether they were purchased for a monetary consideration. The jury is out on this one. 

UNQUOTE

Defined Contribution is not new in the UK, it is more than ten years old. I think IMHO Pensions is the area this new law will founder.

Juan

 I posted the article specifically about the calculation, but IMHO i tprovides a very good summary of the requirments, following a lot of debate and discussion, all of which I have read, and made a number on contributions (under another name).

Think you're splitting hairs about the wording, but I think the word "new" is used to try differentiate from "defined contribution" schemes, which most people are familiar with, but still confuse with "defined benefits"

As far pensions and reporting are concerned, this is from another post I made

The other point I have made before, in addition to the need for purchase with capital, is that under a defined benefits scheme, you have the right to a income as a pension. It is clear, (well to me anyway) that they relate all the valuations, reporting detail etc, back to the wealth tax law, and under that law rights to a pension are exempt.

I think to understand the difference you have to consider the reasons for the new law. In addition to information for future capital gains, inheritance and wealth tax etc, they are interested in assets that may have been bought with undeclared income. Anyone can buy an annuity with a cash sum, a defined benefits pension is built up over a period of time, with above board, recorded contributions from employees and employers.

Because there is so much conflicting advice on pensions re the assets law, I emailed Blevin Franks, who confirmed that you do not include them on the form, only if an annuity.

Is there no one in a high place who could confront the Government/Hacienda and tell them the detrimental affect this new law is having on the expat community, with its confusing information that even tax accountants and other experts can't understand, and its disproportionate heavy handed fines for innocent and advertant errors? Considering how much Spain benefits from us all you would think they would encourage us to pay our taxes, not beat us with a big stick!

 At the moment, the wealth tax is rather a lot more than my meagre possessions add up to.  I pay income tax as a resident in Spain, not as a non-resident.  I did pay the non resident bit at around 60 euros a year.  My income tax last year was 69 cents (yep, 69 cents).  I'm getting ready to pay extra if and when the counting of assets comes in but I'm pretty sure it will only be about what I was paying in UK anyway.  My point is, I'm not hiding anything because I have nothing to hide.  

My point is, I'm not hiding anything because I have nothing to hide. 

Then you will have nothing to pay.  Nothing as changed.  The tax  liability is that same as it was last year.
 

Johnzx: "Sorry to keep saying this but the declaration requirement are not, as you appear to say, aimed at non-Spanish .    They are the same for everyone"

The intention of this new legisaltion may not have been to target foreigners (although I have my doubts). The result is that it does.