Wealth Tax/Patrimonio

Hi,

I'm new to the forum and very impressed with the membership expertise! I have a property in Spain and am considering moving here permanently in the near future.

Regarding Wealth Tax there are a couple of claims on the web that it will be abolished from 2017 (normally with the caveat 'we'll believe it when we see it'). Given that Spain has yet to form a government is it just pure guesswork at this stage or is there a rationale suggesting that the many renewals of this temporary tax will cease?

Under current rules does anyone know if a UK SIPP needs to be included in the WT calculation? (I'm in my 40s so will not access these funds for some time). Assuming (he said!) SIPPs are not included would this be the case if you do not touch the funds even after age 55?

Finally, I understand the Hacienda includes overseas property in the WT calculation but how do they determine the value to be used of a UK property?

Great to be on board the forum :-)

I would suggest you seek independent advice on this because, like you, we were considering a move to Spain. We went through a whole host of issues with our Spanish "abogado". When it came to the SIPP the lawyer wanted to reach an independent ageement with the Hacienda - the reason being that the assets are held in a "trust - wrapper" and Spain understanding of trust is not necessarily consistent with the UK.

Hence, if for example the SIPP assets are held in equities, and these derive income, unless you have a clear understanding over this, it may be viewed as income to you and taxed accordingly. I am not an expert and am just giving a word of caution.  Get a good abogado!

In the end we did not proceed, with the tax/financial consquences being an issue at the time.

Saludos

Wealth tax is dependent on the region you are moving to. For example, Valencia Region has a 100% rebate so you pay nothing. Under the national rules, a resident married couple will be entitled to an allowance of €2,000,000 (yep, 2 million euros) which is made up of €700,000 each plus €300,000 each on your main home. The calculation of assets does not include

So, unless you have a combined asset of over 2 million euro then it won't affect you.

Saying that, it was virtually abolished some 7 or 8 years but was reintroduced so I wouldn't go by the to be abolished by 2017. They can set taxes to zero but very rarely abolish them to leave them room to bring it back in again.

From Angloinfo, the following assets are not included in the calculation for wealth tax:

The following assets are exempt from wealth tax:

• Household contents (excluding jewels, fur coats, vehicles, boats, art, and antiques)
• Pension rights
• Owner-managed small businesses
• Family companies meeting certain conditions
• Shares in property investment companies where the company carries on a commercial activity
• Intellectual property rights in the author’s ownership
• Business assets (to qualify the activity must be the taxpayer’s main source of income and be carried out by the taxpayer on his own account and on a habitual basis)

Your annual asset declaration does not attract tax but any income derived from it will be (eg savings interest).

I have a feeling Alex may actually be refering to, or confusing wealth tax with, the overseas asset declaration (modelo 720), which is different to wealth tax. i.e. the 720 is simply a declaration of your overseas assets. Either way, though, it's a complicated issue, and it's best to seek professional advice - although even that can sometimes be conflicting!

I would suggest a fiscal asesoría or gestor rather than an abogado.

Good luck!