over 50k property in partners non redisent name can it avoid new tax laws?

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23 Nov 2014 9:26 AM by axti101 Star rating. 24 posts Send private message

We have 3 uk properties. All with mortgages. "IF" they are in my name (as the non spanish resident, as I will live in uk due to work commitments and only come to spain for around 100days per year) then spain cannot tax us, is that correct? My wife will become resident as we want to send our daughter to spanish school. Each house has less than 50k equity, but combined they are over 50k. Would appreciate any thoughts on this matter.   Many Thanks 


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23 Nov 2014 9:36 AM by Poedoe Star rating in Berkshire, England. 83 posts Send private message

If you want you daughter to be educated in Spain & your wife is resident in Spain then you should expect to pay Spanish Taxes, Why would you think you would get these wonderful services free. There is also Sumo tax on all the properties.

I purchased an apartment 8 years ago and have paid the Sumo tax every year, there is also the local tax that covers the refuse collection & road care do you expect to get that free also. 

I have not moved to Spain yet or let my apartment because our complex is still waiting for our Habitation Certificate or FOL. We still pay the Spanish property taxes.


This message was last edited by Poedoe on 23/11/2014.

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23 Nov 2014 9:41 AM by axti101 Star rating. 24 posts Send private message

She will rent in Spain,  and will pay all her taxes.  Why should Spain tax us on our UK property? 





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23 Nov 2014 9:58 AM by Tadd1966 Star rating in Los Montesinos. 1754 posts Send private message

If you work in UK and pay UK taxes and NI etc and are a none resident and spend less than 183 days in Spain then the Spanish taxman cannot touch you.

As you wife and daughter will live in Spain as residents the UK will pay for health care via S1 form as they are classed as your dependants and you are paying into the UK system

Other "free" services such as education, fire and police will be covered as your wfie will be paying council taxes etc and ALL children have a right to education as an EU citizen resident in any EU state.

Ther may be questions in regards to your "centre of interests" but the bilateral tax agreement between UK and Spain (nothing to do with EU) should clear this

If your property in UK is currently in both names and if you intend to transfer to your name only then you may run into problems as you wife will still be deemed to have a vested interest (or claim) on these.

Suggest you talk to a solicitor to get definitive answers

 



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23 Nov 2014 10:03 AM by Hephaestus Star rating in The Peak District Na.... 1230 posts Send private message

Model 20 costs Spain more than it brings in, all of my income and wealth was accrued in the UK, so why should I throw myself at the mercy of the Spanish tax man?. And as for Brits getting all these wonderful things that Spain has to offer for free, every nationality in the world (including Spanish) take full advantage of the UK's health, education and benefits, but I suppose that they don't count.



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23 Nov 2014 10:10 AM by Team GB Star rating. 1245 posts Send private message

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axti101

You are talking about the Modelo 720 reporting requirement for residents of Spain, there are different types of asset class, property being one of them, so with your three properties having a combined asset worth of over 50k€ after mortgages you should complete the form by the end of March if you are a resident.

Lets dispel a myth that dosn't seem to go away - there is no tax liability arising from this return, in common with many European countries this is a information gathering exercise designed, if you beleive them to counter money laundering.

However, it's also a great tool for the taxman to cross check your main tax return, ie, if you declare a bank account with 100k in it they would expect to find some bank interest declared on your tax return I'm sure. Likewise, with property, if you dispose of a property in a given year, report it on a 720 they would be able to check if any CGT tax was due. So on and so forth with rental income, inheritantce tax etc

We live in a modern world, it's no longer accepted that a married couple have to live together full time, many couples don't for many reasons.



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23 Nov 2014 12:35 PM by camposol Star rating in Camposol. 1406 posts Send private message

axti101-if your properties are in joint names then your wife will have to declare her share of them on the modelo 720, plus she will have to declare any rental income from them on her yearly income tax return, plus  not to forget  any savings, or investments which total over 50k euros in each category also have to be declared on the 720.

 

Even if they are not rented out she will have to pay " imputed income"( the income you would receive if you did rent them out) crazy isn't it?

Also, of course, I assume she is making a tax declaration on all her income wherever it comes from, pensions, savings , including Isas, interest, iinvestments etc.

Crooksey  why should you throw yourself at the mercy of the Spanish tax man- well if you are resident here,  why shouldn't you ? If you live here you should  pay the appropriate taxes here.





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23 Nov 2014 1:16 PM by Hephaestus Star rating in The Peak District Na.... 1230 posts Send private message

camposol, without going too deep into my UK finances, I am handling some issues in the country of their origin, I find the UK revenue suits my requirements. We could come over to Spain and spend circa €60,000 p/a, as it stands we won't be doing that, obviously a win win situation for Spain. We hardly pay any tax (quite legally before the indignation posts start landing) and with a bit of enjoyable spending, should be able to reduce our estate to the £650,000 last survivor exemption figure, something that we could never achieve in Spain. We might just buy a Spanish property in our son's name and drive over with our dogs for a couple of three months spells p/a, who knows what the future might bring?



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24 Nov 2014 8:25 AM by axti101 Star rating. 24 posts Send private message

Some great advice. Thank you everyone for your comments. 





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24 Nov 2014 8:49 AM by johnzx Star rating in Spain. 5242 posts Send private message

 We might just buy a Spanish property in our son's name

I believe, at least technically, your son would then be liable for gift tax





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24 Nov 2014 10:43 AM by Hephaestus Star rating in The Peak District Na.... 1230 posts Send private message

'I believe, at least technically, your son would then be liable for gift tax'

Check out PET's 



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