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Goldenmaniac
17-09-2011, 19:05
At a meeting of the Spanish Cabinet yesterday the move to restore the Patrimonio (wealth) tax was ratified.

The tax had effectively been suspended after the then Socialist government reduced the amount of the tax levied to zero, whilst still leaving the law enabling it on the statutes.

However there is still some confusion over how many people will have to pay it, and what regional governments will get out of it.

Ministers have been accused of causing confusion and muddying the waters over the various Spanish autonomous regions’ entitlements, after government spokesman José Blanco said 90,000 wealthy individuals would have to contribute more to the ailing economy, The Economy Minister, Elena Salgado estimated on Thursday that 160,000 people with assets of over 700,000 euros (excluding that of their primary residence) would be liable.

Primary residences with a value of up to 300,000 euros are exempt.

Blanco added further to the confusion on Friday when he said “no region will charge twice,” a reference to the compensation that autonomous regions have been getting from Madrid since 2008 to compensate for lost income due to the reduction of the tax to zero. Salgado, however, had contradicted him and had said the regions would continue to receive this money, plus whatever they could collect through the reinstated tax.

The tax which will remain in place for just 2 years, this year and in 2012, is expected to bring in over 1 billion euros source:http://newsinthesun.com/2011/09/even-ministers-confused-by-re-introduction-of-wealth-tax/

There are a couple of things to note so far I think;
One this will not need to be addressed until at the earliest January 2012 and up to Dec 2012 for Non resident returns. And end of June for Resident returns ( because no amendments have been made to the underlying legislation only the % payable and exemption amounts on the taxable base .

Two Logically if you are fiscally non-resident your primary residence can not be in Tenerife. If your property is high end and you can't deduct it from your assets value suddenly 700,000 euros is not as much as you think!

However I stress these are only my initial thoughts and as a royal decree needs a lot of reading through..... I may be gone some time :)

BoPeep
19-09-2011, 10:46
I think there will be some very cheap valuations of principal residencies in the UK!

Goldenmaniac
19-09-2011, 11:58
It doesn't quite work like that, if your primary residence is in the UK and you are fiscally non- resident here, then it would only be property in Spanish territories that would attract the tax if valued at more than 700,000

BoPeep
19-09-2011, 12:29
Sorry Goldmaniac, dont understand. Do you mean that the primary residence opt out clause for primary residencies under 300,000 euros wouldnt be valid for non residents? I though wealth tax ( once you were over the principal residence threshold) was on worldly assets?

Goldenmaniac
19-09-2011, 16:50
bienes inmuebles a no residentes sin establecimiento permanente

For those who are fiscally non-resident in Spain and do not have a permanent establishment here (ie do not run their property here as a business), it is my understanding only the assets in Spanish territory are liable for Patrimony tax.
Otherwise we are into dual taxation issues.

World wide assets would be applicable to those fiscally resident in Spanish territory.

But if there's a heavyweight double impositions tax person out there, would be grateful for their input.