Re: Declaring assets/income
 

Thanks Fred.

That's the main reason I've posted the figures a couple of times. I think unless people are aware it may come as quite a shock.

Re: Declaring assets/income
 

Remember that from April 2013 onwards split year treatment is only possible in the UK if you are resident in that tax year under the new rules.

http://www.hmrc.gov.uk/international/rdr3.pdf

This can work in your favour when returning, but against you when leaving. It is a question of counting the days spent in the UK and the other connecting factors.

Re: Declaring assets/income
 

I have a question re. the declaration of annuities on the modelo 720 and the possible implications for inheritance tax from this.

When inheritance tax needs to be looked at, the info. suggests that ALL worldwide assets will be taken into account, how would the Hacienda approach annuities as they value them as an asset? We know that in the UK there is no asset value on any annuity!

Surely these annuities asset values should not be included at thje time of inheritance tax obligations! There would only be a wealth tax possibility at some time!

I am probably concerned for nothing but has anyone any ideas?

Re: Declaring assets/income
 

Particularly if you live in Murcia, where regional IHT allowances have been abolished, leaving only the paltry 16,000 euros state allowance to offset against a large sum, resulting in a whopping IHT bill! Imagine having assets of 200,000 plus which will be quite usual if you have a property and savings, you will hand over a huge chunk of it. Since all the ways of reducing the bill have lots of flaws, best thing is to wait till you get back to the UK before kicking the bucket!
The Hacienda now have a handy check list, all ready for the IHT calculation, from those who submitted the 720;those who didn't presumably will get away with it as as the tax man doesn't know what assets they have, and where they are-so much for trying to be legal!

Re: Declaring assets/income
 

Have you access to this handy list?

Re: Declaring assets/income
 

The" handy list "is your 720 submission, detailing all your overseas assets!

Re: Declaring assets/income
 

The handy list only takes in those of us who have assets over 50,000 euros not those under the threshold or have not considered the need for them to be declaredl

A sitting target for us eh!

Re: Declaring assets/income
 

For the Form 720 declaration, annuities are valued in the same way as they are for wealth tax.


The value at 31 December based on a capitalisation value of the income produced based on the official interest rate of 4%.

Essentially what this calculation does is work out how much money you would need to invest to get an income equivalent to the money paid from your annuity. This results in a surprisingly large figure but this is discounted depending on your age and the figure for a 65 year old is 24%. This increases by 1% for each year less than 65 and decreases by 1% for each year more than 65.

For example, if you want to make €1 interest from a 4% investment you would need to invest €25. So if the income from your annuity is €10000 you would have to invest €250000. If you are 65 then you only take 24% of this figure which is €60000 so that is today's value of your annuity.

Re: Declaring assets/income
 

Yes, it annoys me. People could have 49,995 euros in each category, and the Hacienda would never know. Perhaps ALL assets should be declared, to be fair to all!

Re: Declaring assets/income
 

I thought the asset declaration was to catch the big fish salting millions away. I don't think it should be extended to include everyone with small assets.

We have voted with our feet and are no longer living in Spain. We have been told that we do not even have to spend 90 days in the UK as long as we don't overstate in Spain. We are nit prepared to go along with the New rules any longer

Re: Declaring assets/income
 

'The good news says the INE (International Statistics Institute) is that the number of Russian and Moroccan residents is increasing.'

This comes from a paper source I couldn't quote from. The number of British residents leaving in 2012 and 2013 was quite small, around 2.5%, but came after massive yearly increases since the nineties.

The article doesn't make sense to me, are they saying that Spain welcomes Russian and Moroccan immigrants because they are more likely to pay taxes in Spain than the Brits?

Could it be true?

Re: Declaring assets/income
 

[QUOTE=Fred James;11106197]For the Form 720 declaration, annuities are valued in the same way as they are for wealth tax.


The value at 31 December based on a capitalisation value of the income produced based on the official interest rate of 4%.

Essentially what this calculation does is work out how much money you would need to invest to get an income equivalent to the money paid from your annuity. This results in a surprisingly large figure but this is discounted depending on your age and the figure for a 65 year old is 24%. This increases by 1% for each year less than 65 and decreases by 1% for each year more than 65.

For example, if you want to make €1 interest from a 4% investment you would need to invest €25. So if the income from your annuity is €10000 you would have to invest €250000. If you are 65 then you only take 24% of this figure which is €60000 so that is today's value of your annuity.[/QUO


Thanks for your reply and yes I know the way that annuities are calculated but my query is that an annuity has no real value and will not be available as an inheritance for anyone. (If your OH is part of the initial annuity plan where they will receive a proportion of the the annuity on the death of the annuitant, this must be a separate contract and not an inheritance).
So how can this asset value in the many thousands of euros, be part of the inheritance tax calculation! (Or is it not?)

Re: Declaring assets/income
 

[
Thanks for your reply and yes I know the way that annuities are calculated but my query is that an annuity has no real value and will not be available as an inheritance for anyone. (If your OH is part of the initial annuity plan where they will receive a proportion of the the annuity on the death of the annuitant, this must be a separate contract and not an inheritance).
So how can this asset value in the many thousands of euros, be part of the inheritance tax calculation! (Or is it not?)[/QUOTE]

I think it would depend on the way the annuity was contracted. Insurance policies can be liable for inheritance tax so I would be inclined to get some professional advice on this if it is a major concern.

Re: Declaring assets/income
 

I agree with that. It depends on your annuity. Some cease on death, some pay a spouse on death (usually 50%), so presumably this could be included, because it has a future value.

Re: Declaring assets/income
 

Thanks for your comments.
Over the past year someone who unfortunately has had this type of inheritance tax issue maybe able to assist with their comments.