Old shares led to Spanish tax torment
Financial troubleshooter Jessica Gorstwilliams is here to help you with your money problems
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Jessica, Telegraph Money,
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Why won’t this insurance pay up?
More than a year ago I was diagnosed with a heart condition that causes an irregular heart rate called paroxysmal atrial fibrillation.
Recently the attacks became more frequent and I was too ill to work and was signed off.
I then corresponded with Reassure, with which I have a family income protection plan that I have paid into monthly for 25 years. I requested a claim form but this was denied. I feel thoroughly let down.
You are now 64. This policy was designed to provide a replacement income if the policyholder was unable to work because of sickness or disability. It had a small investment portion as well. You were signed off work just a year after the diagnosis.
In fact, the cover expired two months after you put in your claim. Before that there was a deferred period of six months during which no payment would be made.
Although premiums continued to be collected on the policy, no investment units had been cancelled to pay for cover beyond the six months before the maturity date. Instead, the money was invested in your chosen investment funds. The investment amount in all totalled £1,698 and has now been paid to you.
A spokesman for Reassure said: “It’s common for income protection policies to have a deferred period before payments start, because people in work generally receive sick pay from their employer for an initial period.
“The deferred period is usually aligned to the point at which sick pay would stop, and helps reduce premiums. Mr K had the option of deferred periods of two, four, six and 12 months when he took out the policy. He selected six months, stating that he had cover of full pay for six months from his employer.
“While we’re sorry to hear that Mr K is no longer able to work, we’re satisfied that his claim has been processed as per the terms he selected when he took it out. We strongly recommend that all customers regularly review their income protection, particularly if they change their employer, where their entitlement to sick pay may be different.”
Do I need to fill in Spanish tax form?
As a result of the demutualisation of Abbey National and Alliance & Leicester, I acquired what later became 225 Santander shares.
I recently received a cheque for £18.89 relating to the outcome of a rights issue. Santander told me that I had to fill in Spanish tax form 210 online and enclose an HMRC certificate declaring myself a UK tax resident. I might also require a Spanish tax representative.
I have the tax declaration, but I am an 80-year-old widow lacking a computer and computer skills. The library staff I asked to help could get form 210 online only in Spanish.
According to Santander, which has been most unhelpful, failure to comply with this tax law will result in an initial fine of €100 (£88), which can then rise. What do you suggest I do?
DB, SOUTH WALES
This concerns recent changes in Spanish tax law. I understand that Santander is trying to work with the Spanish tax authorities to see if they would consider any change to the process.
Given the modest sum involved and the fact that the transaction is exempt from any tax payment in Spain anyway, this bureaucracy is more than a little onerous.
The bank’s adviser had given you the web address and told you how to download the form and find guidance notes. This was beyond you and left you feeling scared.
Further to my involvement, Santander said: “On review, while no errors have been made on our behalf, we understand this process was causing Mrs B concern.
“To support the customer, a Santander adviser has printed out a copy of the online form and posted it to her home address. Mrs B can then complete the form and return it to the adviser directly, along with a copy of her HMRC certificate, to submit the form on her behalf.”
This all happened, but the whole exercise turned out to be less than easy as there were difficulties obtaining the required NIF code, a tax ID number in Spain.
However, the completed form has now been returned along with the required paperwork to the Spanish authorities in Madrid. You say you are thrilled that this is sorted out.
You have sold your shares now to avoid having to contend with all this in the future. In the sale process, one stray share was left over. You gave this to charity. For information on how this is done, contact Sharegift on 020 7930 3737 or sharegift.org.
Because of the volume of mail received, it is not possible to respond to every letter, and correspondence cannot be entered into. Please do not send original documents or stamped and addressed envelopes. Responsibility, legal or otherwise, for answers given cannot be accepted. Cases currently with an ombudsman, going through a court of law or sent to other columns will not be considered. In addition, I cannot take up issues when the writer is a third party, other than in exceptional circumstances. I cannot respond to emails.
Abbey National customers got shares when it demutualised