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Fivepence
04-03-2013, 16:38
Will this make members who are resident on the island consider their position?
According to the article a large number of ex-pats are leaving Spain.

A member asked a question about this on a thread last week and she was worried.
I suggested she contact forum member @Goldenmaniac (http://www.tenerifeforum.org/tenerife-forum/member.php?222-Goldenmaniac).


British people living in Spain must declare all their assets held outside the country to the Spanish authorities under new rules designed to target tax evasion.
Residents have until April 30 to declare all relevant overseas assets worth more than €50,000 (£44,000) and could face huge fines for not complying.
Assets include bank accounts, property and other movable assets such as shares, life insurance policies and annuity income.
David Truman, a partner at accountancy firm Menzies, said: “My understanding is that clients are considering or are leaving Spain as a result of the introduction of the new rules.
“It does appear to be concerning people, and it does appear to be driving people out of the country.”
British expatriates are considered residents in Spain if they spend more than 183 days a year in the country, or if their spouse and dependent minor children live there.
The Foreign Office estimates that 800,000 British nationals live all or part of the year in Spain. Residency is difficult to measure, but estimates vary from 250,000 to 400,000.
Residents must declare the value of their assets on December 31 last year and failure to do so could result in fines exceeding the value of the asset.
Mr Truman said: “They are asking people to declare their assets, which will give them the ability to cross-check that information with what you have put on your tax return.
“If someone is already compliant, they will have forms to fill in that they didn’t have to before. But if you have been living in Spain without declaring your overseas income, you could be in trouble.”
Callum Girvan of financial management firm Blevins Franks said: “We’ve been running seminars and it is clear it has caught the attention of UK nationals living overseas.
“We are strongly telling our clients that they should declare. The penalties are quite prohibitive, and you could end up paying more tax than your asset’s worth.”
The minimum penalty for failing to declare an asset is €10,000, as well as income tax on undeclared income, late-payment interest and penalties as high as 150pc of the total tax due on the asset.
For example, a Spanish resident with €300,000 (£260,000) in an undeclared overseas account would incur the minimum penalty of €10,000 (£8,640), and see the amount taxed at the top interest rate of 52pc. But they would also be fined 150pc of the tax owed and 4pc annual interest going back four years, meaning they would owe the Spanish taxman €424,960 (£368,000), according to figures from Blevins Franks.
Unpaid tax as a result of undeclared overseas assets worth more than €120,000 (£104,000) could also be considered a criminal offence of tax fraud.
The authorities are looking for people who not only own the asset but are the beneficiary or authorised signatory. The law also requires the average balances of bank accounts in the last three months of the year, and the acquisition value of properties.
In future the deadline will be the end of March, but you will only need to report the assets again if their value has increased by more than €20,000 (£17,000.
A spokesman for the Spanish tax authority said the globalisation of financial activity and increasing problems with fraud made it necessary “to establish a specific obligation of information on assets located abroad”.
He said residents who were unsure of how to submit their declaration, which has to be completed online, should visit their nearest tax office for further information.
Mr Girvan said: “Different governments across Europe are looking at tax declaration. The pressure to raise revenue means that any legitimate methods to generate funds will be pursued.”
Thousands of British expats and second-home owners have been leaving Spain in recent years as its economy teeters.
Spain, the eurozone’s fourth-largest economy, slipped back into recession in 2011 and the economy shrank at the fastest pace in more than three years in the final quarter of 2012, according to the Madrid-based National Statistics Institute. A 26pc unemployment rate and a series of austerity measures have prompted mass protests.
The falling pound has meant expatriates dependent on sterling incomes, such as a pension annuity, have seen their incomes slashed.
Average property prices have fallen by 30.7pc from the 2007 peak, according to Eurostat figures, while the cost of maintaining a property overseas has continued to grow.
Mark Bodega, marketing director of currency firm HiFX, said: “Just as a number of eurozone governments have increased the taxation burden on holiday-home owners, sterling depreciation is acting as a double whammy, hitting owners firmly in the pockets.
“With many analysts expecting further sterling depreciation, cost of ownership for Brits with property in the eurozone is likely to increase."Here is the link to the article (http://www.telegraph.co.uk/finance/personalfinance/expat-money/9907124/Spain-tells-British-expats-to-declare-overseas-assets.html)

timmylish
05-03-2013, 01:42
But does the UK not already have similar laws on taxable assests outwith the UK?

johnnieguitar
05-03-2013, 16:03
But does the UK not already have similar laws on taxable assests outwith the UK?

It does. Most countries have reciprocal tax agreements. A resident of one country is taxable, in that country, on assets held in another country. In most cases, however, you get credit for any tax paid in the other country (e.g. on bank interest).

9PLUS
05-03-2013, 17:57
Spain will eventually fine it's way out of the crisis.

Balcony
05-03-2013, 18:02
It's so cool, don't ya think, that the tax authorities will probabaly target another easy prey, whilst their own seem to get away with so much.

TF1
05-03-2013, 18:09
You can actually get fined for running out of fuel on a public road in Spain. And if I remember correctly some chav got fined in La Laguna for farting a few years ago. And now we might be fined for not declaring interests in the UK. So ...... why are so many politicians not getting fined for having and not declaring huge amounts of shares with overseas brokers? I've said it before and I'll say it again, the most effective policy to enforce voluntary tax co-operation would be for those at the top to show an example. Why should I declare what I have in the UK just so that the PP can then steal it and hide it in Swiss bank accounts?

patrick2976
10-03-2013, 10:38
It's a serious issue not to be ignored alright. However pensions are specifically not included. Also if you have millions (or just a few bob) hiding in a Swiss bank account....Now might be the time to declare it and put it in a spanish compliant offshore bond. That way it's legitimate in the eyes of the Hacienda but they can't get their mits on it and it grows free of tax if you leave it alone........and even if you want to withdraw lump sums the tax position is very favourable. :wink2:

Marianne
10-03-2013, 11:55
You can actually get fined for running out of fuel on a public road in Spain. And if I remember correctly some chav got fined in La Laguna for farting a few years ago. And now we might be fined for not declaring interests in the UK. So ...... why are so many politicians not getting fined for having and not declaring huge amounts of shares with overseas brokers? I've said it before and I'll say it again, the most effective policy to enforce voluntary tax co-operation would be for those at the top to show an example. Why should I declare what I have in the UK just so that the PP can then steal it and hide it in Swiss bank accounts?

As UK expats you'll find that wherever you go and live, you have to declare ALL your assets for tax locally- be it cash, property, expensive works of art, watches, jewellery, etc. It is amazing that this has not been the case so far. Fair enough, I say. We certainly do declare all and pay our dues.

Can you really expect to have your cake and eat it - and especially with Spain being in such a mess at the mo and having to find solutions, one way or other?

It would be the same if you had chosen to live in any other EU country, Switzerland, the US, etc.

princessmonika
10-03-2013, 12:19
why does it only apply for UK residents in spain--

karinagal
10-03-2013, 12:22
why does it only apply for UK residents in spain--

It might not be just UK residents Monika, but remember that Southern Ireland has its own government and the rules might therefore be different...

princessmonika
10-03-2013, 12:52
but karina, as i understand, it is the spanish government who are looking for the people of the UK' who live here permanent ,to declare there moneys abroad ,if you live in spain/ canarian islands more than 6 month at a time you become permanent resident??? as i understand??? so you and i are going back and forth ??

Pooh
10-03-2013, 13:00
It's not just British Expats.
The article referred to in the original post is from a UK paper, so it just mentions Brits, but it's the same for all, regardless of country of origin.

patrick2976
10-03-2013, 13:04
It doesn't. It's a national decree applying to every resident of Spain. Nationals incuded. In fact wealth spaniards who try to hide their assets abroad are the main target of this legislation. Of course we are all getting caught up in the net.

princessmonika
10-03-2013, 13:06
but is it only,if you are a fiscal resident i spain-- because if you pay your taxes in the country of origin, they cannot double tax anybody in the EU

Pooh
10-03-2013, 13:07
but is it only,if you are a fiscal resident i spain-- because if you pay your taxes in the country of origin, they cannot double tax anybody in the EU

If you're not a fiscal resident you're not an Expat, you're a Tourist.

princessmonika
10-03-2013, 13:11
But if you have the NIE papers ,what are you ? residentcia, or not?

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does that apply to pensioners as well????

patrick2976
10-03-2013, 13:14
but is it only,if you are a fiscal resident i spain-- because if you pay your taxes in the country of origin, they cannot double tax anybody in the EU

Be careful of that misconception. If you are resident in Spain you are liable to Spanish tax - even if you still pay UK taxes.

Pooh
10-03-2013, 13:17
If you live here more than 3 months per year, you need a residency permit. That is the same in most countries, including, I believe, the UK.
Where you are taxed, depends on which country you spend the most time in, per year. If you spend more than 182 days per year in Spain, you need to be a Fiscal Resident, and pay your tax here. (Although tax like property tax has to be paid regardless of time spent here.)
That is the same for Pensioners, but you get a discount for whatever tax is paid at the source.

princessmonika
10-03-2013, 14:46
also for people renting living here all year round, but are paying there taxes in the UK my friend does-- does this apply to her??????

grumps
10-03-2013, 14:51
I rent here and spend over six months here as well ..and pay tax in the uk, i probably won't live here like this permanently so what do i do..?

Pooh
10-03-2013, 15:17
If you live in Spain more than 182 days per year, you are supposed to be a fiscal resident and pay your taxes in Spain, not UK.
It doesn't matter if you rent or own, it's where you actually live that matters.
If you pay tax at the source in UK, you would get credit for that when doing your tax in Spain, but living here more than 182 days a year and NOT register as fiscal resident is illegal.
The same goes for UK, or any other country, for that matter.

Marianne
10-03-2013, 15:30
183 days and over in Spain = resident = taxes in Spain - same for any EU country - simple retired or not.

You then tell the UK tax office you are now resident in Spain and pay tax there. That does mean you will not be entitled to NHS either.

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also for people renting living here all year round, but are paying there taxes in the UK my friend does-- does this apply to her??????

Of course it does- what made you think it didn't? Same for all expats from wherever ... be it in Spain, France, Switzerland, Italy, etc. Not quite sure how to say this, but I am a bit surprised people make the decision to live abroad without doing basic research. We still have a flat in UK, and go very regularly - but spend more than 182 days in France, so pay taxes here, no longer in UK. That is The Law.

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183 days and over in Spain = resident = taxes in Spain - same for any EU country - simple retired or not.

You then tell the UK tax office you are now resident in Spain and pay tax there. That does mean you will not be entitled to NHS either.

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Of course it does- what made you think it didn't? Same for all expats from wherever ... be it in Spain, France, Switzerland, Italy, etc. Not quite sure how to say this, but I am a bit surprised people make the decision to live abroad without doing basic research. We still have a flat in UK, and go very regularly - but spend more than 182 days in France, so pay taxes here, no longer in UK. That is The Law.

for more basic info

www.Expatica.com

princessmonika
11-03-2013, 09:56
does this apply to pensioners as well over 65 /70???????? there is no double taxation anywhere in the EU

patrick2976
11-03-2013, 10:18
does this apply to pensioners as well over 65 /70???????? there is no double taxation anywhere in the EU

Sorry, are you talking about pension income or some other overseas asset?

Anyways the basic tax position is you are a tax resident in spain if you're here for 183 days a year. If you were being taxed here and in the UK on income the Hacienda would tell you to try and claim your tax back from HMRC under the double tax treaty. One of the many reasons people transfer UK pensions to an overseas scheme or have their savings in an offshore bond etc...

BoPeep
11-03-2013, 10:29
Putting residency down to the 183 day rule is wrong, the HMRC has won legal cases where people have said they are not resident in the UK because they have not lived there for 183 days in one year and have lost their case in court in the UK because the HMRC have proved that their main business and family lives are still in the UK.

In order to be definitely not British resident anymore you have to cancel all memberships in the UK, have no obvious main work or business there and no family obligations. It also has to be over a few years, you cannot just cancel memberships for a year for example.

Goodness only knows about Spanish law!

patrick2976
11-03-2013, 10:40
Putting residency down to the 183 day rule is wrong, the HMRC has won legal cases where people have said they are not resident in the UK because they have not lived there for 183 days in one year and have lost their case in court in the UK because the HMRC have proved that their main business and family lives are still in the UK.

In order to be definitely not British resident anymore you have to cancel all memberships in the UK, have no obvious main work or business there and no family obligations. It also has to be over a few years, you cannot just cancel memberships for a year for example.

Goodness only knows about Spanish law!

Yes, that's true. But the 183 day rule is your starting point. It is true that you may have a case for tax residency if you have many ties to the Uk and few in Spain (i.e. you don't have a house in Spain, you don't have children in spanish schools etc... But who would want to take HMRC to court? Or the Hacienda for that matter....

BoPeep
11-03-2013, 10:42
Its not you taking the HMRC to court......they take YOU to court to get the taxes they reckon you owe!

patrick2976
11-03-2013, 10:47
Sorry - I misread your post. However just because of these cases it is not a reason to ignore the 183 day rule. That forms a big part of the picture.

Pooh
11-03-2013, 10:55
Putting residency down to the 183 day rule is wrong, the HMRC has won legal cases where people have said they are not resident in the UK because they have not lived there for 183 days in one year and have lost their case in court in the UK because the HMRC have proved that their main business and family lives are still in the UK.

In order to be definitely not British resident anymore you have to cancel all memberships in the UK, have no obvious main work or business there and no family obligations. It also has to be over a few years, you cannot just cancel memberships for a year for example.

Goodness only knows about Spanish law!

You might end up fiscal resident in BOTH countries, that is true. But you can't select to NOT be a fiscal resident in Spain, if you live here more than 182 days per year.
However, thanks to the double-taxation rules, you get credit in Spain for anything you pay in the UK. You do not pay double tax on the same income.

seanocelt
11-03-2013, 13:10
QUESTION: on the new asset values; can a married couple split the assets in name, to avoid being over the 50k in each? eg..... 51k in a bank, split it in to an account each?

Pooh
11-03-2013, 13:35
QUESTION: on the new asset values; can a married couple split the assets in name, to avoid being over the 50k in each? eg..... 51k in a bank, split it in to an account each?

Don't know; But there is only a requirement to report it. You don't actually pay any tax on the assets until it's over 700k

golf birdie
11-03-2013, 14:03
Don't know; But there is only a requirement to report it. You don't actually pay any tax on the assets until it's over 700k

are you sure about the 700,000?

Pooh
11-03-2013, 14:23
Yes, 700k, and you can deduct 300k value from your permanent home value.

http://es.wikipedia.org/wiki/Impuesto_sobre_el_Patrimonio

Here is an instruction how to actually declare the assets. It has to be done electronically, on Modelo 720.

http://www.rankia.com/blog/impuestos/1623888-modelo-720-que-como-rellenarlo

Marianne
11-03-2013, 14:39
does this apply to pensioners as well over 65 /70???????? there is no double taxation anywhere in the EU

Of course it does, age makes not difference. If you live in Spain for 183 days a year, you pay tax in Spain .. some pensions are taxed in UK then you would deduct from Spanish tax. No double-taxation.

Tenerife Blade
11-03-2013, 22:32
QUESTION: on the new asset values; can a married couple split the assets in name, to avoid being over the 50k in each? eg..... 51k in a bank, split it in to an account each?

Just bumping this as I'd be very interested to know if anyone knows the answer.

golf birdie
12-03-2013, 11:44
QUESTION: on the new asset values; can a married couple split the assets in name, to avoid being over the 50k in each? eg..... 51k in a bank, split it in to an account each?

take 2k out and stick it under the bed:laugh:

sorry, only bumping as I too would love to know the answer otherwise I can see a lot of people buying safes in the near future.

Pooh
12-03-2013, 14:08
At least from what a Spanish tax expert claims in one of the links I provided earlier, the value of common assets are split according to the percentage owned of it.
So if you own a 50% each of for example a property, or a bank account, or any kind of asset or a combination assets outside Spain, that has a total value over 50,000 but less than 100,000, you wouldn't have to declare it, since your share is less than 50,000.
But as also mentioned - there is not tax on any of it, unless the total value of assets inside and outside Spain - less up to 300,000 for the property you reside in - exceeds 700,000.

If you have (your share) 51,000 in a bank account outside Spain, and no other assets inside or outside, you would need to declare it, but not pay tax for it. So there is no need whatsoever to put them in a safe, or in the mattress.
But if you have 51,000 in an account outside Spain, and 650,000 in a Spanish account, you would need to declare the one outside (since they know about the Spanish one anyway), and you would also need to pay tax, since the total is over 700,000.

If you are two people, and own 50% of the assets each, the total amount would be double.

Megaloo
21-03-2013, 15:08
I think there was a link posted for the Model 720 form I cannot find it, can someone help please a friend needs it. thanks

patrick2976
21-03-2013, 15:21
I think there was a link posted for the Model 720 form I cannot find it, can someone help please a friend needs it. thanks

You can access the official online form for declaring your assets here;

https://www.agenciatributaria.gob.es/AEAT.sede/tramitacion/GI34.shtml

You need a digital signature to do this which you can get here;

http://www.cert.fnmt.es/index.php?ch...age=35&lang=es

Canarian Weekly
22-03-2013, 11:50
Declare your assets, or risk a hefty penalty IT’S official! If you are a resident in Spain, or in our case Tenerife, you must file an annual, detailed declaration of assets held overseas. And that applies to everyone, whether of Spanish descent or a foreign national, such as British, for example. The British Embassy has [...]

More... (http://www.canarianweekly.com/bury-head-sand-tax/)

essexeddie
03-05-2013, 19:36
Anybody read this.
Glad I'm not a resident



http://www.dailymail.co.uk/money/mortgageshome/article-2317127/Expats-head-home-Spain-forced-declare-overseas-assets.html

warbey
03-05-2013, 19:51
..

Sensationalism that in this case is Justified...

I have wondered how Legal this is. Apparently it isn't...?

I too am glad I am not a Resident with a few Bob on one side...

cressrt
03-05-2013, 20:21
This is not new it has been known about and widely publicised all year.

essexeddie
03-05-2013, 21:05
Quite a lot is not legal in the EU.
They are a load of crooks.
I'm voting UKIP and I dont think I'm the only one.

atlantico
04-05-2013, 17:26
an easy way to determine if this rule/law applies to you is if you complete an annual declaración de la renta (http://www.agenciatributaria.es/) to the tax office.

Yes, if you live here over 183 days you should be resident, but if you don't become one, thats another issue. How can they insist you declare your worldwide assets if you haven't registered as a resident. Its a catch 22 situation. SO, a lot of permanent residents who are not legally registered as residents (declaración de la renta) will find that this rule doesn't apply to them, purely on the fact that they are already here illegally !

ie. A drug dealer can't declare his income/profits to the tax man and pay his dues, because what he does is illegal . A residential property owner can't declare holiday rental income tax, as they rent out the property illegally.

essexeddie
04-05-2013, 17:52
Fortunately it doesn't apply to me as I dont stay more than 183 days and dont let. I only keep enough money in the Bank to pay the bills. But I'm sure they will think of other ways when they are more desperate, and I think they will be.

BoPeep
04-05-2013, 18:28
We rented out illegally and paid the tax on it for years in Tenerife because they apparently do not differentiate between long term rental (legal) and touristic rental (illegal)!

By the way, 700,000 euros has been quoted above for when the tax starts but that is 700,000 each if you are married and your assets are joint.