As you may be aware, the Hacienda is doing an audit (going back to 2017), on residents who have been declaring pensions income as an annuity.
Well they have finally clarified what conditions a pension must fulfill to be classed as an annuity here in Spain, and having a statement from a UK provider stating it is an annuity is not enough…they must meet the following criteria:
The main one being that the annuity has a SURRENDER VALUE.
The information required by the Spanish tax authorities:
1) Date of contract and date of commencement of annuity income
2) Identification of you and the company
3) Contingencies covered
4) Redemption conditions and surrender value (must have a surrender value)
5) Duration, amount and form of benefits
6) Form of premium contributions – periodic or single payment
If the tax office contacts a client they have TEN DAYS to present the information and lodge an appeal. To appeal against this decision, the client must produce a certificate from each company with the above six details (but specifically with the Surrender Value).
Christina Brady – Blacktower Financial Management