Originally Posted by Fred James

I can't see how you can have a habitual home in two different places - under the tax treaty you can only be tax resident in one or the other and that's where your habitual home would be deemed to be.

You could not claim council tax against the imputed tax on a UK property any more than you can claim IBI against the "imputed rental income" tax that you pay on second homes in Spain.

The tax form does, as you say, allow for declaration of overseas property and there is nothing in the guidance to suggest the you don't have to declare the imputed tax.

As you say, this is where some decent advice is called for but there seems a distinct paucity of that!

Originally Posted by guirijohn

The Double Tax Agreement determines in which country you are considered resident if you have homes in both, but tax residence is quite different from your habitual home. Habitual home under Spanish tax law requires a”continuous period of residence”, it is not dealt with in the DTA.

Spanish taxpayers cannot claim the IBI because they are not subject to double taxation. We are.

Originally Posted by CapnBilly

The OECD model of double taxation defines "habitual abode" as

Habitual abode
You will be a resident of the State in which you have a ‘habitual abode’. This test which is applied to each State is whether you live in that State regularly, normally or customarily. The number of visits as well as the duration of the visits are taken into account and this test is applied over a sufficient period as is necessary depending on the facts of each case.
If you cannot be said to have a habitual abode in either of the two countries or you have a habitual abode in both of them, you should move on to the next test.

The next and final test is residency. Interestingly it does say you can have a habitual abode in both countries.

Originally Posted by Fred James

I can't see how you can have a habitual home in two different places - under the tax treaty you can only be tax resident in one or the other and that's where your habitual home would be deemed to be.

You could not claim council tax against the imputed tax on a UK property any more than you can claim IBI against the "imputed rental income" tax that you pay on second homes in Spain.

The tax form does, as you say, allow for declaration of overseas property and there is nothing in the guidance to suggest the you don't have to declare the imputed tax.

As you say, this is where some decent advice is called for but there seems a distinct paucity of that!

Originally Posted by Sir John

Hi Fred,

A hyperthetical question maybe you might know the answer to?,if i bought a small flat in the uk to use for myself just for returning back home 2 or 3 times a year to see my kids & friends ect,so when i was not there it would be uninhabited no one living there,would i be liable to pay any kid of tax to the hacienda,i would obviously not be receiving any income or rent?

Originally Posted by surreygirl

There is what is called "imputed tax" but dont ask me how that is worked out. I think it goes on how much you paid for the property orignally but dont quote me, it is just that my Gestor told me that I would not be liable as I purchased my property 25 years ago and therefore the original price was under the limit!

Originally Posted by swinbc

Re Losviv,
I know exactly what you mean I have the same issue re GMP which represents 50% of my annuity. Regardless of what has been said previously re annuity having to declare etc, I think this issue is still a very grey area and needs challenging. Seems to be many people on this site just not willing to make a stand or persue the issue and that is like bending over backwards to me.

Originally Posted by Fred James

Acquisition price converted to Euros at the rate at 31 December 2012

Originally Posted by Fred James

There is some uncertainty as to whether the imputed tax applies to UK properties but if it does it is calculated on the original purchase price and there is no lower limit to what has to be declared.

I think you are getting confused with the asset declaration, which is entirely different, and yes, there is a minimum limit of €50k below which it does not need to be declared as an asset.

Originally Posted by Sir John

Hi,

My gestor tell me that it is under the section of SAVINGS.

Originally Posted by swinbc

I have taken professional advice re which asset class a Fixed term Bond from a Bank should be included in. I am told that as long as the Certificate was issued with the word BOND included in the description of the product then it can be classed as a Bond in the securites and Annuities class. This has helped me as now my normal bank accounts now do not have to be declared as the amount to less than 50K. Maybe this is a useful loop hole!

Originally Posted by Fred James

I discovered an interesting fact today while trawling through the Internet regarding guidance on this asset law.

Apparently UK property owned by Spanish tax residents is liable for the "imputed rental income tax" that applies to Spanish property owned by non residents or by residents who own second homes. The "second home" can be outside Spain and still be liable for this tax.

I doubt that many expat tax residents are aware of this and of course as you now have to declare the ownership of these properties there could be an interesting demand for unpaid tax.

In Spain the tax is based on the catastral value. The information I found from a Madrid based advisor is that income is calculated as 1.1% of the value which is deemed to be 50% of the acquisition price (which is what you have to declare on the new asset declaration) This income is added to your normal income and taxed at whatever rate applies depending on your total income.

It would take a few seconds for the Hacienda computers to do a cross check on whether tax has been paid previously on the property you have now declared.

It just gets worse and worse.