Fred James

Of course they are but if you don't declare them and then later they find them then they are taxed as immediate income.

If you declare them then there are no problems at all and they will only be taxed the same as normal which presumably they were already.

Fred James

If you are resident in Spain then when you die the assets in the UK are liable for Spanish IHT.

Nothing has changed unless you intended to avoid IHT by not declaring those assets for IHT.

This law is mainly intended to catch Spanish people with large assets in tax havens around the world. Unfortunately it also applies to expats who quite reasonably have assets in their country of origin.

If someone has very large investments offshore it is reasonable to assume there is some income arising from them which should be taxed. Unfortunately this will also apply to bona fide property owned in the UK which is not let for income and bank accounts that probably don't generate any significant income.

What is happening is that us "poor" expats are likely to be caught up in a major anti fraud program that was never intended to involve us.

If it wasn't for the huge penalties involved we would almost certainly ignore it or at least take a chance on being found out.

Fred James

Unfortunately it doesn't work that way.

If you were here until the end of June then you are tax resident for the whole of this year. The clock starts ticking again on January 1 this year so if you want to avoid residency you will need to get out before the end of June and not come back until 2014.

me me

But do you think it is really possible for the Spanish tax office to find these assets ie houses, when it seems even the British powers that be fail so miserably in the same task and are constantly having the wool pulled over their eyes.

How can hacienda hope to police it.

Mitzyboy

That actually stands a chance

bobd22

Fred you have summed it up well and as you say the Expats are being caught up in something not intended for them. My point is that I have kept a property in the UK as I don't like burning my bridges altogether. Of course many expats, no doubt many on here may well have done that so their assets are in Spain. As I say as I am not yet resident I will use my Spanish property as best I can but will as it stands at the minute not be coming over permanent and taking residency. Of course that is not what I intended when I bought my house but my view is just have to remain flexible. Of course financially that may in the future become restrictive.

CapnBilly

It will be called the 720. There's been a draft on their website for about 2 weeks, but it just reads like an IT analyst's specification

http://www.agenciatributaria.es/stat...720_Observ.pdf

http://www.agenciatributaria.es/stat...cion/Anexo.pdf

Domino

as said earlier, this is primarily designed to catch out the Spanish with offshore assets as well as their hidden onshore assets. The draconian fines are supposed to be a warning to those who don't come clean.
But we already know that many Spanish have assets hidden away, even if it is in Bin Laden €500 notes under the bed.

After all, the Spanish taxman hasn't been able to get his head round the fact that a civil servant/mayor etc with a publicly known salary of (say) €70,000 suddenly manages to buy a €2.5m cortijo and employ 2 servants.

But, of course the poor old expat, with a small property in the UK, retained for emergency purposes if things go pear shaped in Spain, who fesses up to having a bit of money will become an easy target - in the same way as all those clobbered by the CSA because they were honest and open whilst those who told lies walked away laughing.

But it is new and will take a bit of time to bed in, and as the "interpretation and implementation" of wealth for residency is varied this may also become subject to "interpretation and implementation"

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Fred James

Thanks for finding that - they must have hidden it well!

It looks horrendously complicated - lets hope the final version is easier to understand.

I can see all these financial advisors rubbing their hands in glee at the prospect of charging loads of money to fill it in for you. It looks much more complicated than the income tax declaration!

At least it looks like it can be submitted online (assuming you have an electronic certificate).

Porth

This is a mirroir image of the French approach. You have to declare all bank account details whether or not they are truly active and have money in them. We too have a UK house for the day when we wish to go back and after our little holiday in Spain! It is rented out an we declare the income and then put against that repairs and the like.

That is why we are renting in Spain for if it does not work out and we buy then we are stuck. It took us years in France to sell one large and one very small house and the cash is back in the UK.

I thought retirement was about going off together into the sunset. Acting upon advice we have drafted wills which ring fence the UK assets and another which ring fences what is left in France. But if Govts need the cash they will go after you and in our case we are small fry but as already posted we are caught up in all of this.

best wishes.

Rotor

Absolutely, there's no benefit to being a Spanish resident , some ex pats have to be through unfortunate circumstances , best to spend the relevant amount of time outside Spain

Mitzyboy

Amen!
Spain shoots itself in the foot yet again

bobd22

Just going back to this thread as I know this declaration has also been discussed on the Income Tax thread. I remember Fred mentioning to a previous query I had re this that when you declare it is up to you to declare the value also that an asset such as an house if in joint name is divided between the 2 owners i.e. me and the wife. Savings wise I am not worried as by splitting ours savings we are below the Euro 50,000 each. However we downsized last year in the the UK and our current house is now quite modest in NE England, although we would have paid slightly more than the 50,000. House prices in our area have fallen a little I would imagine. How if they did query a property in the UK would the Hacienda get the value of a property? as far as I am aware the land registry will have the record of ownership but not a value? I know you can find out what a house was last sold for from the likes of Zoopla but that is historic. Obviously if you have quite a substantial house which say you paid well over their limit for even allowing for you declaring a little under the value you would be over the limit.

Mitzyboy

Also, if you have an endowment policy ..... how do you know how to declare its value as all the insurance co will tell you is that it may not cover your mortgage

CapnBilly

As far as I can see the property value you have to report is the acquisition value, so the value now is irrelevant. Besides providing information that you have a potential income generating assets, it also gives them information for inheritance and wealth tax calculations. Also my wife said she heard Bill Blevins on the radio this afternoon talking about the information it provides for potential capital gains tax if you dispose of it !. Good job you got rid of your larger property then Bob.

As far as today's valuation is concerned, that's not too difficult. It's all based on square footage per area