Re: Declaring assets/income
 

An important piece of information I thought worth sharing re the 720 declaration;
For those of you out there holding assets/investments in a Spanish compliant 'off shore' tax wrapper (portfolio bond) Hacienda have stated that you do not need to complete the modelo 720 in regard of those assets if the life company (wrapper provider) already does so. If the life company has fiscal representation in Spain it is very likely that they do an annual return to the tax authority and therefore ,effectively, fulfil the obligation on your behalf. SEB for example are very specific about this.

Apart from taking some of the hassle out of life this may have other benefits....

Re: Declaring assets/income
 

The financial advisers, Blevins Franks are quite often mentioned on various 720 message boards. They claim to "minimise taxes by placing funds into legitimate tax efficient vehicles that allow you to mitigate tax in Spain, sometimes significantly."

Does anyone know what Blevins Franks’ 720 magic bullet is?

Re: Declaring assets/income
 

I bet it's Spanish compliant bonds

Re: Declaring assets/income
 

Yes. Spanish compliant portfolio bonds. Only issue with BF is they try to make you pay for a trust as part of the set up. This is unnecessary in most cases as Spain doesn't recognise trusts. They are an anglo saxon structure.

Re: Declaring assets/income
 

Isn't there a minimum amount required?

Re: Declaring assets/income
 

No, it's just like any other investment. Just that this one is with stocks & shares (funds).

I moved my investments into a "Spanish Wrapper" a few years ago as it was the only way to mitigate tax whilst being resident in Spain.


BF also have VERY high charges!


PS - This has nothing to do with modelo 720 which was just a reporting exercise and has nothing (yet) to do with tax (other than to let hacienda know what you should have been declaring any way!).

Re: Declaring assets/income
 

The minimum investment is 30,000 euros.

Re: Declaring assets/income
 

Really? My IFA says otherwise.

Re: Declaring assets/income
 

Yep. SEB min initial investment is 30,000 euros. Skandia International £37,000. Those are the two main providers.

Re: Declaring assets/income
 

So that's no use for someone with less than that who wants to reduce IHT?
Those with more modest savings will still be clobbered!

Re: Declaring assets/income
 

It depends....although Spanish succession tax (IHT effectively) exists between spouses there is an allowance of around 15,000 Euros (not very generous I know...)
Also in Spain it's not the estate of the deceased that has the liability (as it is in the UK) - it's either the beneficiary or the individual assets themselves. Therefore if you have (for example) beneficiaries who are UK residents and (for example) money in a UK bank account there would be no IHT due upon your death as a Spanish resident . If on the other hand you left money in a Spanish bank account for your children (resident outside Spain) there would be Spanish IHT subject to the local allowances (as it's an asset in Spain).

Re: Declaring assets/income
 

I don't think so!
I understand that IHT is due on the worldwide assets of the deceased;therefore any money. assets anywhere is going to be taxed.
You rightly say that the state allowance is small-it's an insult;this allowance has not been increased for many, many years and would go nowhere against the IHT on the property and assets.

Re: Declaring assets/income
 

No, worldwide assets are only taxed if the beneficiary is Spanish tax resident.

So, if a Spanish tax resident leaves his UK property to his son who is UK tax resident, there is no Spanish tax to pay.

Assets located in Spain are always taxed in Spain, irrespective of the tax residency of the beneficiary.

Re: Declaring assets/income
 

I think you're mixing up the world wide asset declaration (modelo 720) with succession tax in Spain.
Of course there is still the issue for expats in Spain who are deemed to be UK domiciled upon death - then HMRC will try to tax your worldwide assets no matter where you live (although there is an agreement in place between Spain and the UK which can be used to negate depending on circumstances)

Re: Declaring assets/income
 

Patrick-No-can't see why you said that
Fred thanks for clarifying the IHT issue