NEW TAX LAWS

[Dave22]

Babyboomer, don´t you also have to notify them if you don´t have any assets outside Spain above €50K?

I know we were asked to fill in a nil return which we did - presumably so the Tax people don´t have to needlessly chase people up for a return.

Youu have to make a return even if it is a nil return

No, not if you have no income ,or income below 8k euros.

[alfie]

A lot depends on if you take your interest gross or nett. If interest is paid nett [ie tax deducted at source] you will not pay tax again. If interest is paid nett, you should have reported the interest on your last tax return, so that the Spanish tax-man colud calulate the tax owed.

[Babyboomer]

As far as I am aware this Law has been around for years - and it is not just Spain where people have been dodging this Tax  every year- every country in the EU is now naming the people who have assests in other countries and have not been paying Tax on them in either country.

Up to this last year we had investments in Spain where we paid Tax on them - and we then moved them to Tax Free  Off Shore Accounts in Guersney  due to the lack of confidence in the Spainish Banks - Only to find the Off Shore banks now have to comply to this ruling also  - So this next year wewill still have to pay Tax in Spain once again - but we feel the Guernsey banks are more secure.

As I understand it, within the EU it has been a requirement for several years - UK implemented it in 2007 but Spain has only just passed local legislation. I think you will have to pay tax for 2012 if the value is over €50,000 for each person, not just from here on in.

[The Sheriff ILLIA.]

As far as I am aware this Law has been around for years - and it is not just Spain where people have been dodging this Tax  every year- every country in the EU is now naming the people who have assests in other countries and have not been paying Tax on them in either country.

Up to this last year we had investments in Spain where we paid Tax on them - and we then moved them to Tax Free  Off Shore Accounts in Guersney  due to the lack of confidence in the Spainish Banks - Only to find the Off Shore banks now have to comply to this ruling also  - So this next year wewill still have to pay Tax in Spain once again - but we feel the Guernsey banks are more secure.

[Babyboomer]

There is a detailed explanation in this weeks EuroWeekly News on page 26 by Bill Blevins of Blevins  Franks. Well worth a thorough read.

[byrney]

At least Dick Turpin had the decency to wear a mask, eh John ?!!

[Beachcomber_Bar_Mojacar]

http://www.theentertaineronline.com/news.php

More here and more tomorrow, John.

[Babyboomer]

Babyboomer, don´t you also have to notify them if you don´t have any assets outside Spain above €50K?

I know we were asked to fill in a nil return which we did - presumably so the Tax people don´t have to needlessly chase people up for a return.

Youu have to make a return even if it is a nil return

[byrney]

Babyboomer, don´t you also have to notify them if you don´t have any assets outside Spain above €50K?

I know we were asked to fill in a nil return which we did - presumably so the Tax people don´t have to needlessly chase people up for a return.

[Babyboomer]

I think the new law is Ley 7/2012  details can be found at  http://www.boe.es/boe/dias/2012/10/30/pdfs/BOE-A-2012-13416.pdf and retrieved as a document.
Spanish residents (in Spain over 183 days a year) with more than €50,000 in assets outside of Spain must decalre them by 31st March 2013.
Assets include

• All accounts held with financial institutions
• Real estate and rights over such property
• Shares and Securities
• Life Insurance Policies
• Temporary or life time generated income.

[alfie]

Google is your friend !
Here is the form you need to fill in:
http://www.hmrc.gov.uk/cnr/dtindividual.pdf
Of course, you need to be registered with the Spanish tax authorities, as they have to complete and stamp part of the form.
As has been said many times on this forum - go to a good advisor [there are numerous threads about who is good!]
Personally, I would take everything to Marina in Huercal Overa [search the threads] and let her advise you. Efficient, reasonably priced, and she knows everyone at the HO tax office!

[Alnamabaz]

Hi there very confused me!
Does anyone know ow to get the link to the dual taxation form? Does this apply if you do not have property in the UK only savings?
So many questions!

[byrney]

Yes BB.  We also told the UK what we were doing/had in Spain, and Spain what we were doing/had in the UK.

It sounded to be the most sensible/legal thing to do at the time and I think that has proved correct - although others thought we were mad for being so honest and above board.

Unfortunately it seems there are now some people who didn´t do it and are unfortunately starting to come unstuck.

[Babyboomer]

Slightly  :notopic: but what Spain is doing is no different in principle to the UK getting people to register foreign bank accounts some 7 years ago. Which of course we all did.

[byrney]

Sorry Alfie, I thought I´d said that the necessary dual taxation paperwork was needed to avoid being taxed twice.

[alfie]

The only thing is Byrney, if you are resident in Spain and paying taxes in the UK, the Spanish authorities can also legally tax you as well on the same income. So you need to take advantage of the 'dual-taxation' exemption, so that you only pay taxes in Spain and none at all in the UK

[byrney]

I don´t think anyone need worry about this "fact-finding" mission by the Tax Authorities, as long as they have been paying their taxes either in the UK or Spain and have been completing the necessary annual paperwork as the good majority of us do.  After all, it´s illegal not to do so.

[alfie]

So as to be clear, this is NOT a tax on assets, but is designed to 'discover' income from these assets that is being hidden from the Spanish tax-man.
You will not be taxed on the value of a house you may own in the UK, but you will be taxed on the income the house generates [ie rental]. If you are living here for more than 183 days a year, then you are a Spanish resident for taxation purposes, and should pay tax on the rental. As stated earlier, if you get the correct certification, you can prove to the UK tax authorities that you are paying tax here in Spain, and therefore will not be taxed twice.
As has been said, if in doubt get professional advice.

[byrney]

Under the EUs dual taxation system you are not required to pay tax on the same assets in more than one Country.

However, you should have declared your UK assets to the Spanish Tax Authority when you completed your Spanish Tax Form (as is required by Residents) and shown that you have already paid UK tax.

If you are seeking exemption from paying UK tax you need a form signed by the Spanish Tax Authority declaring that you are a Spanish Resident for tax purposes and are liable to pay taxes here.

It is worth spending a few quid on expert advice because following advice from amateurs (myself included) could prove to be very costly if they start levying fines for non-compliance - which seems like the next logical step for them if they are hell-bent on draining us.

[Saffi]

It is a new law but the key thing is you MUST declare all assets over 50000 euros in the FIRST QUARTER of this year and failure to declare is a fine of 10000 euros per non declaration!  Not worth hiding - my big question is what happens to those who declared rental income form property in the UK to the UK, as is required by law yet did not declare it here in spain believing tax to already be paid on it due to declaration in the UK?

Will there be back taxes and fines for those in this category?

What about mortgages on the property abroad?

So many questions,.....if anyone ahs a link to the form I would like to see it as not received one yet.....

[Babyboomer]

Are  you talking about the UK taxing overseas assets based on the UK fiscal tax year of April 6th 2013 to April 5th 2014?
or
Spanish tax which is based on Calendar years?
I have contacted my Spanish tax adviser to see if they know the answer. If I get somet50hing back I will post it.

My tax adviser says there is a new Spanish tax on Spanish residents who have assets over €50,000 outside of Spain and she will send me the form.
I am probably fortunate in that the house we have is registered in four names two of whom are UK residents and tax payers. So the value is split into
quarters. I will get it valued before filing the value. When I get more detail I will post it here.

[Lesley and Pete]

Yes Alfie - I was thinking that too.  Certainly I didn't think it was a new requirement.  Is there not a requirement to declare any worldwide assets as part of the 'Renta'?  Also, I recently had to update our mortage arrangement out here and the bank brought out all our previous papers, including all Renta declarations, (all legal documents!), and checked what properties we owned both in Spain and abroad, (only have a house here, so no problem).  Anyone who has not sorted out their own personal situation really should do so, and I guess that there are a number of people who have returned to the UK and currently rent out their Spanish property who do not declare the income from that either, (in either the UK or Spain).  The potential permutations are numerous!

Lesley

[byrney]

Thereby lies the problem Alfie.

I suspect there may be one or two people living here who have rented out their property in the UK and do not declare this "income" to either the Spanish or UK tax authorities and, hence, pay no tax on it.

As you say Alfie, if you´ve nothing to hide, there´s nothing to worry about.

To those people who have done this I suggest they get their house in order quick-time before the authorities catch up.

[alfie]

Just to be clear, this is not a new tax, but an obligation to declare assets over €50k that you own abroad.
You have to pay tax on all worldwide income if you are a Spanish tax-payer, and this new requirement is aimed primarily at wealthy Spanish tax-payers who are 'hiding' assetts and income abroad, so as to avoid paying tax.
If you are paying Spanish tax on your worldwide income, you are OK, -  if you are not paying tax, then you should be, and the Spanish authorities will be looking for you.
Personally I see no problem, as I declare all income to the Spanish tax-man and therefore have nothing to hide.

[sharon123]

well i cant see any one telling them they have assets in the uk, i know loads that are resident that have property in the uk which is let out and have done nothing, if spain wants the money let them move their butts and find out for themselves, dont want to sort out what is needed like the housing problem but just what gains them and thats it, just my opinion.

[ramblarider]

I'm just taking a look at this myself...

One thing I immediately noticed was that they ask for a declaration of property, at purchase price... so, if subsequently sold, they could assess it at Spanish rates for CGT.... now, it may be that in the UK you have accumulated tapered relief for CGT if that was your previous home, with the net result no tax would be payable. However... if, say you had owned a home for 25 years, then sold it now, the potential CGT would be horrendous with no relief, as Spain does not recognise UK tapered relief . As a lot of people here do own homes still in the UK, this is significant.

[Alnamabaz]

Thank you Babyboomer, I will look out for your answer and yes Byrney I totally agree with what you stated.
It seems if you work, save hard and try to gather a little to leave to your kids (on which you have already paid tax), they will find you and force a little more out. GREAT!
pmt

[byrney]

A couple of weeks ago we received a letter from our Solicitor (who also deals with all our Tax stuff) asking us both to fill a form in advising of any assets out of Spain above €50,000.

This was due to (yet another) new Spanish requirement.

On seeking clarification, joint assets are shared 50/50 for this purpose.

It didn´t worry us as we have no assets above €50K (wish we did!!!) so we just sent off a blank form.

Do you get the feeling that now they´ve bled us dry financially they are making it as difficult as possible for us to stay?

[The Sheriff ILLIA.]

You will only pay Tax in Spain on assets you hold in the UK which are Un-Taxed.

[Babyboomer]

Are  you talking about the UK taxing overseas assets based on the UK fiscal tax year of April 6th 2013 to April 5th 2014?
or
Spanish tax which is based on Calendar years?
I have contacted my Spanish tax adviser to see if they know the answer. If I get something back I will post it.

[Alnamabaz]

Hi there has anyone any more information about the new income tax laws starting end of April where anyone who has over €50000 in assets abroad will be taxed on this under spanish law although tax is paid in the UK?
All I have read is very confusing. Any info welcome