Spanish Tax Specialists Tue, 24 May 2011 07:45:54 +0000 en-US hourly 1 Small Victory for UK Homeowners in Spain Mon, 09 Mar 2009 10:19:26 +0000 mike

11_256x256.pngA court decision in Spain has opened the way for thousands of UK citizens to reclaim some of the tax they paid when they sold their homes there.

The High Court in the region of Valencia has ruled in favour of a British couple, Mr and Mrs Roy.

It told the Spanish tax authorities to repay them for being charged a capital gains tax levied at 35% instead of 15%.

A spokesman for the Roys’ law firm said it was gathering similar cases, with an average claim worth £14,100.

“This discriminatory law was in force for many years,” said Emilio Alvarez of Valencian law firm Costa, Alvarez, Manglano.

“It will have affected thousands of people,” he added.

Read more…

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Spanish Tax Men Get Tough On British Homeowers Fri, 12 Sep 2008 19:07:02 +0000 mike Owners of Spanish property could lose their homes if they fail to produce new identification documents proving their non-resident status, writes Ali Hussain of the Times Newspaper.

Britons who use their overseas accounts to pay for their Spanish mortgages and essentials such as utility services and council taxes, have been required by Spanish banks to produce a residence certificate or “Residencia” since March last year.

Failure to produce the new documents could result in bank accounts being frozen and mortgage repayments stopped.

However, some Spanish banks have failed to contact homeowners or given short notice to produce the papers.

One reader, Simon Wells, 52, from Walthamstow, East London, said that on August 15 he was told by his Spanish bank, Cajamar, to produce the documents by September 15.

“This is not easy to do as you have to register in person at a Spanish police station and then have it stamped by a town hall official. We were warned our account could be frozen.”

The requirement is part of an EU initiative to crack down on tax dodgers. Spanish residents are taxed at source, so to avoid paying tax there you have to prove non-residence status.

Britons — there are about 145,000 with bank accounts and properties in Spain, said broker Savills Private Finance — have to declare gains made in Spanish bank accounts to the UK taxman.

You qualify for non-resident status in Spain if you spend fewer than 180 days a year in the country and are able to produce the new document.

Anyone who bought a property before the new rules came into effect may be asked by their Spanish bank to produce the Residencia. Those who bought property after they were introduced will have been told of the requirement.

Residence certificates include your name, address, nationality, date of registration and the “Numero de Identificacion de Extranjeros”, a tax number for foreigners in Spain.

The Spanish Tourism Office said: “If you have a Spanish property, and have not been asked to produce this document, I suggest you contact your bank directly.”

Homeowners can contact the Spanish Ministry of the Interior’s immigration directorate helpline for more advice on 00 34 913 639 071.

To apply for the non-residency certificate you usually need to go in person to the Oficina de Extranjeros or police station in your province of residence.

The document costs about €10-€13, although if you go through a lawyer you may have to pay more than €120 (Approx. £97.20).

Find the nearest Oficina de Extranjeros at

Article courtesy – Times Online.

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Spanish Wealth Tax Abolished Fri, 29 Aug 2008 05:15:46 +0000 mike Spanish ‘Wealth Tax‘ has been abolished with effect from 1 January 2008. (Impuesto Extraordinario sobre el Patrimonio)

As this tax was levied based on assets held on 31 December of a given year, the tax for 2007 will therefore be payable as usual during 2008. However no wealth tax will be payablle for 2008 itself during 2009.

The tax treatment for residents and non-residents is different. Residents pay this tax on their worldwide assets, less various exemptions. Non-residents pay the tax only on assets held in Spain, but there are no exemptions.

Undoubtedly the move, announced after the re-election of the Spanish PSOE government, is designed to mitigate the damage to the Spanish housing market and construction industry in the wake of the current economic downturn; it may also encourage some people to re-locate to Spain if 18 per cent income tax is the only tax they will have to pay.

Whilst because of the allowances available this affected non residents more than residents it is none the less a welcome move.

This also means that non resident owners who did not like to sort out their own wealth tax may no longer need to retain the services of a fiscal representative; however, you do need to check out your agreement with your representative and give them notice as soon as possible.

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Spanish Pensions Surplus Fri, 14 Mar 2008 11:26:10 +0000 mike

Spain’s Social Security system is on track to post a surplus in excess of the government’s EUR 8-billion target this year.

MADRID – Spain’s Social Security system is on track to post a surplus in excess of the government’s EUR 8-billion target this year, even in the light of recent increases in unemployment and slower growth in many sectors of the economy, Labour Minister Jesús Caldera said on Wednesday.

Speaking at a conference on the economy organised by Spanish business newspaper Cinco Dias, Caldera rejected “alarmist” claims about the supposed ill health of the jobs market after the number of people looking for work soared in December and January.

“The Spanish economy is still functioning well and creating employment,” Caldera said, noting that even during the slower job market of the last two months contributions to the Social Security system increased by EUR 1.2 billion, or 6.6 percent.

The minister said that so long as that rate of growth continues until the end of the year, the government will surpass its target of EUR 8 billion, and would be on track to boost the Social Security reserve fund to around EUR 90 billion within four to six years. That, Caldera said, would ensure Spanish pensions could continue to be paid for at least a decade without the system running a deficit, overcoming at least some of the difficulties presented by an ageing workforce.

Caldera is heading the Socialist Party’s campaign for re-election in the 9 March general election.

[Copyright EL PAÍS 2008] – Article courtesy Expatica.

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QROPS Press Release Thu, 13 Mar 2008 11:57:43 +0000 mike The UK Inland Revenue has given Britons living abroad an unexpected bonus. For those who intend to remain permanently abroad it is now quite simple to transfer their UK pensions to more tax friendly jurisdictions via a Qualifying Recognised Overseas Pension Scheme (QROPS).

After a qualifying period individuals can access their funds in their entirety and use the capital and income in the way that is most tax favourable for them and upon their death, they can leave it to whomever they like.

This compares most favourably with the pension regime in the UK and ex pats around the globe should be making it a priority to remove their funds from the UK as quickly as possible.
A degree of caution should be exercised because some QROPS appear to rely on artificial contracts of employment, which would of course incur huge penalties.

For clear impartial and appropriate advice contact Free My Pension.

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Liechtenstein Scandal Update Tue, 04 Mar 2008 20:13:19 +0000 mike An update to the story earlier –

The Spanish tax office confirmed at the weekend that it has obtained the names of 100 Spanish citizens believed to have evaded taxes in Liechtenstein

3 March 2008

MADRID – The Spanish tax office confirmed at the weekend that it has obtained the names of 100 Spanish citizens believed to have evaded taxes in Liechtenstein, becoming the 15th country involved in an international probe into fiscal fraud in the Alpine principality.

Tax officials did not disclose the identity of the suspected tax evaders, although most are believed to be wealthy business owners with millions of euros of financial assets deposited in Liechtenstein banks. They are among hundreds of people named on a DVD purchased by the German government from an informant last month, which ignited the international scandal.

Since then 15 countries have said they are investigating tax fraud by their citizens in Liechtenstein. The number of people under investigation by Spain is comparable to those being probed by the United States, while Italy says it is investigating 150 people and France 200. Germany says more than 1,000 of its citizens are suspected of evading taxes to the tune of EUR 4 billion.

According to Spanish authorities, tax officials are attempting to determine the full extent of the evasion carried out by Spanish tax payers. Those who owe the tax office less than EUR 120,000 will face fines and sanctions imposed by the tax office directly, while those owing more than that amount can expect to face criminal charges in court, authorities said.

[Copyright EL PAÍS / LUCÍA ABELLÁN 2008]

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Liechtenstein Fraud Probe Thu, 28 Feb 2008 21:23:47 +0000 mike

A rapidly expanding international probe into tax evasion centred on Liechtenstein spread to Spain on Tuesday.

27 February 2008

MADRID – A rapidly expanding international probe into tax evasion centred on Liechtenstein spread to Spain on Tuesday, with the Spanish tax office confirming that it is joining a growing list of countries investigating citizens with bank accounts, companies and foundations in the Alpine principality.

The potentially massive case of tax fraud emerged earlier this month when Germany admitted to paying EUR 4.2 million for information on German nationals with accounts at LGT, a private bank owned by Liechtenstein’s royal family. Britain, France, Italy, Sweden, New Zealand, Australia and the United States have since launched their own inquiries. Spain on Tuesday became the latest to target its citizens who had allegedly been using LGT to hide money from the tax office.

“We are analysing information about Spanish citizens included in these lists of bank accounts and deposits in Liechtenstein, which were used, presumably, for tax evasion and fiscal fraud,” the Spanish tax office said in a statement.

It said that after it has studied the information it will decide whether to launch further investigations or to turn individual cases over to prosecutors to bring criminal charges.

[Copyright El Pais 2008]

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Controversy Surrounds Spanish Tax Cut Vows Wed, 30 Jan 2008 21:53:13 +0000 mike With less than six weeks to go before a hard-fought general election in which the economy has moved centre stage, Spaniards are being showered with promises of tax cuts. But as government and opposition compete with prospective tax breaks, the electorate’s response remains wary.

José Luis Rodríguez Zapatero, the Socialist prime minister who is seeking re-election on March 9, is facing a barrage of criticism this week after promising a €400 ($591, £297) tax rebate for 13m wage earners and pensioners. The measure is expected to cost €5bn, or one-quarter of the government’s fiscal surplus of 2 per cent of gross domestic product.

The prime minister said the rebate was aimed at “stimulating” Spain’s slowing economy. With rising inflation and mortgage payments he wanted to put more money in people’s pockets, Mr Zapatero told a Socialist party conference.

But Comisiones Obreras, the biggest trade union, called the €400 rebate “opportunistic” that smacked of being “a one-off payment for voting Socialist”.

“A blatant attempt to buy votes with public monies” complained Convergencia i Unió, a Catalan nationalist party, which said it would denounce Mr Zapatero’s “banana republic tactics” to the Spanish election watchdog.

Other groups, including some Socialist party allies in parliament, said there were better uses for the government’s fiscal surplus, such as education, home help for the elderly, and other social programmes.

While the opposition Popular party calls Mr Zapatero’s proposal “naked electioneering”, its own tax proposals are equally controversial.

In a bid for the female vote, the Popular party proposes that working women should pay less tax than men. The conservatives want to cut the tax bills of female workers by €1,000, arguing this will encourage women to continue working after they have children and mitigate the cost of childcare.

However, lawyers and feminists have attacked the proposal for being unconstitutional.

“The impact of tax cuts for women could have the perverse effect of lowering female wages even further,” said Asunción Ventura, a professor of constitutional law, writing in the newspaper El País. “Women might be forced to accept lower wages knowing that their tax bills would be lower.”

In addition, the two main Spanish parties say they will simplify the tax regime, abolish wealth and inheritance taxes, and lower the corporate tax rate, currently 30 per cent, to make Spanish business more competitive in European terms. The Popular party wants to raise the tax exempt threshold to €16,000 a year – a level it says would exempt four out of 10 Spaniards from paying income tax.

The Socialists say their measures would also exempt low wage earners from paying income tax.

Neither party had planned to fight the election over the economy. But the end of the Spanish property boom and the international credit squeeze has brought economic worries to the fore.

Copyright The Financial Times Limited 2008

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Overseas Pension Transfers Fri, 04 Jan 2008 15:25:44 +0000 mike

If you have deferred benefits in the UK they will either come from a personal pension or from an occupational pension scheme.

Both will entitle you to some tax free cash with the balance of the fund to be used to provide an income either via an annuity or via income withdrawal.

The maximum tax free cash that can be taken from a personal pension is 25% of that fund and the earliest date that you can normally draw benefits is age 50, soon to become 55.

If it suits, you can defer taking any income until age 75 at which time you will either have to take what is known as an alternatively secured pension or purchase an annuity. The most likely course of action will be to buy an annuity.

If you have funds in an occupational pension scheme you might be entitled to more than 25% of the fund as tax free cash.

All pension funds enjoy a tax favourable status, however, any income drawn is taxable.

For more information please visit

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Expats 'vulnerable to IHT laws' Wed, 28 Nov 2007 08:05:36 +0000 mike As the number of Britons taking up residence in Spain and France soared to a total of 961,000 by the end of 2006, the WAY Group reported a ‘significant’ rise in enquiries from expats concerned by highly complex taxation laws in both France and Spain, especially for Brits who are non-domiciled – i.e., living permanently in one of these countries.
“Up until quite recently we had little or no enquiries on the IHT abroad issue but IFAs are increasingly being asked to restructure clients’ affairs ahead of emigration to the sun. As a result WAY is being asked for comments on the IHT aspects of leaving the UK which is, of course, quite a grey area,” said WAY Group chairman Paul Wilcox.

A key fact which Britons retiring to live in France need to be aware of is that there is no exemption beyond the €76,000 personal allowance on transfers between husbands and wives on death – and, according to the Institute for Public Policy Research (IPPR), there are some 200,000 expat Britons that permanently reside in the country.

“Clearly, in the case of better-off expats, this relatively frugal allowance means that many Brits will be vulnerable – and if assets go directly to the children, each child only has a personal allowance of €50,000,” said Wilcox.

“Then tax from 5 up to 40 per cent will be levied – and many Brits are unaware of the fact that the kids actually have more rights than the spouse under French law.

“Unmarried Brits who live together are also very exposed – as the French will hammer you for 60 per cent.

“But the French tax authorities also have a system known as ‘assurances-vie’, which will allow unlimited amounts to be sheltered from punitive Gallic IHT laws – but it is crucial to set up an IHT mitigation plan before taking up residency.”

Spain, currently host to 761,000 full time resident Brits also has quirky death tax laws. Unlike the UK, assets in Spain do not pass automatically to spouses tax-free on the first death, and the surviving spouse can be vulnerable to Spanish inheritance tax.

“The tax-free allowance is just €15,957, and a further 34 per cent kicks in on amounts over €79,755 – but, in some circumstances, for example if they are not a blood relative, expats can be liable to pay 82 per cent under current Spanish law, unless they have made pre-domicile arrangements,” said Wilcox.

More and more expat Brits are also being caught out by UK IHT, which is payable on ‘worldwide’ assets when they die, depending on their domicile status.

“To change to a domicile of choice, a person needs to prove that they are a resident of that new country and that they intend to reside there permanently or for an unlimited time.

“Retaining residential property or even a burial plot within the UK can give the Revenue enough ammunition to challenge your domicile of choice abroad,” warned Wilcox.

“Pretty much regardless of where you are going, it is important to remove assets from one’s estate before leaving.

“But in doing so, it is vital to ensure that reliable trustees looking after those assets have the power to release funds as necessary back to the donors and, where required, to other named beneficiaries. Failing to do this is where so many expats fall down,” added Wilcox.

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