Modelo 720 - UK Property and Tax
#1
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Thread Starter
Joined: Apr 2014
Location: Halfway between the stars....and the gutter.
Posts: 130
Modelo 720 - UK Property and Tax
Hi all, Couple of quick Q's for anyone who's had experience with the Modelo 720 ta. The wife has just read something online and started asking me questions!
I appreciate the 720 is a prickly issue, but I wanted to get my head round what will happen next year in my case. I didn't have to do anything regarding the tax here for 2014 as I hadn't been here long enough to qualify.
I am 50% owner of 6 houses in the UK. 4 are mortgaged jointly with my wife. The other two are owned outright with me owning 50% in each. I assume I just declare the 50% share of each house? Do I have to deduct the mortgage and just give the actual asset figure?
Next up, rental income for the tax return.
I currently pay tax on the rental income in the UK. Will I need to stop paying it there and start here at the Spanish allowance rates?
Cheers!
I appreciate the 720 is a prickly issue, but I wanted to get my head round what will happen next year in my case. I didn't have to do anything regarding the tax here for 2014 as I hadn't been here long enough to qualify.
I am 50% owner of 6 houses in the UK. 4 are mortgaged jointly with my wife. The other two are owned outright with me owning 50% in each. I assume I just declare the 50% share of each house? Do I have to deduct the mortgage and just give the actual asset figure?
Next up, rental income for the tax return.
I currently pay tax on the rental income in the UK. Will I need to stop paying it there and start here at the Spanish allowance rates?
Cheers!
#2
Just Joined
Joined: Jul 2015
Posts: 1
Re: Modelo 720 - UK Property and Tax
There are potentially HUGE fines associated with this 2012 law. You really need professional advice, if your overseas assets exceed a value of 50k euros, which I rather assume they do. The fine for being simply being late is 1500 euros. And fines for undeclared assets discovered by the Hacienda can be higher than the value of the relevant assets. An appeal against the law is being considered by the EU court but, pending a decision, you should get to know the provisions as well as you can. Though there is very little in English.
#3
Re: Modelo 720 - UK Property and Tax
I (personally) don't know why people are so worried about the 720 declaration - but then that's just my view (naive maybe).
Anyway, rental income MUST be paid in UK and then declared in Spain offsetting any UK tax already paid.
Regarding 720 - I think you simply have to declare the purchase prices for all properties.
Someone who knows better might be along soon ...
Anyway, rental income MUST be paid in UK and then declared in Spain offsetting any UK tax already paid.
Regarding 720 - I think you simply have to declare the purchase prices for all properties.
Someone who knows better might be along soon ...
#4
Re: Modelo 720 - UK Property and Tax
Joint ownership is irrelevant. If you and your wife own a property equally you must both declare if the value is over 50k - you cannot say it was 25k each so it did not need to be declared. It would be the same if you only owned 1%.
As Snikpoh said, you pay tax on rental income in both countries. Income arising in the UK (with some exceptions like pensions) is always taxed in the UK irrespective of your tax residency.
Spain allows you to deduct any tax paid in the UK from the tax due in Spain. Spanish allowances against long term rentals are more generous than the UK so you may find that it results in no tax due in Spain, but that depends on what other income you declare in Spain.
As Snikpoh said, you pay tax on rental income in both countries. Income arising in the UK (with some exceptions like pensions) is always taxed in the UK irrespective of your tax residency.
Spain allows you to deduct any tax paid in the UK from the tax due in Spain. Spanish allowances against long term rentals are more generous than the UK so you may find that it results in no tax due in Spain, but that depends on what other income you declare in Spain.
#5
Re: Modelo 720 - UK Property and Tax
I (personally) don't know why people are so worried about the 720 declaration - but then that's just my view (naive maybe).
Anyway, rental income MUST be paid in UK and then declared in Spain offsetting any UK tax already paid.
Regarding 720 - I think you simply have to declare the purchase prices for all properties.
Someone who knows better might be along soon ...
Anyway, rental income MUST be paid in UK and then declared in Spain offsetting any UK tax already paid.
Regarding 720 - I think you simply have to declare the purchase prices for all properties.
Someone who knows better might be along soon ...
I'm not sure if it's necessary for the property to be let through a letting agent recognised by HMRC and you also have to complete a UK tax return but that can be done online.
Last edited by Mustard; Jul 13th 2015 at 9:00 pm.
#6
Re: Modelo 720 - UK Property and Tax
Yes, you can get it paid gross but you still have to pay UK tax on the income. You do normally get the UK personal allowances to offset against the income.
#7
Re: Modelo 720 - UK Property and Tax
There are potentially HUGE fines associated with this 2012 law. You really need professional advice, if your overseas assets exceed a value of 50k euros, which I rather assume they do. The fine for being simply being late is 1500 euros. And fines for undeclared assets discovered by the Hacienda can be higher than the value of the relevant assets. An appeal against the law is being considered by the EU court but, pending a decision, you should get to know the provisions as well as you can. Though there is very little in English.
Problems and complaints should always be addressed to a moderator who will look into the matter and deal with it efficiently and fairly. Our members who post in the Spain Forums are usually friendly and helpful with a wealth of knowledge about the issues of living in Spain. I hope that you enjoy your time participating in the forums.
Please let me know if you need any further help.
Rosemary