Tax regulations and links to understand how to fill new Spanish tax form-720.
Form 720: Declaration of Assets Abroad. This form must be filled by all spanish residents owning assets abroad over 50.000 euros. This obligation must be fulfilled during first quarter of each year. Although this first year it is possible to fill until April 30th 2013.
- Link to official text of the regulation: http://www.boe.es/boe/dias/2012/11/24/pdfs/BOE-A-2012-14452.pdf
- Link to Ministry Order 72-HAP-2013 governing the presentation of form-720
- Link to government web-application for filling form 720: https://www.agenciatributaria.gob.es/AEAT.sede/tramitacion/GI34.shtml
- Instructions model 720. Design of model and fields
- Official exchange rates that should be used for assets nominated in non euro currencies: BOE-Bank of Spain resolution
In the model must be declared,
- accounts abroad in financial institutions,
- stocks, bonds, values, financial rights, and savings in insurance companies, deposited, managed or obtained abroad
- all types of Real Estate and rights over Real Estate abroad.
Each of the three blocks of goods, constitutes an obligation of different information to be provided, but the three reporting obligations are articulated through the same form. In this way three reporting obligations would be fulfilled by completing the form 720 informing all goods and rights with respect to the obligation to inform
It is excluded from this obligation to declare when the value thereof does not exceed 50,000 € for each type of assets. The presentation in successive years, after presenting form 720 for the first time will be mandatory when the value declared increases by more than 20.000 €.
The Declaration includes a record for each property situated abroad. For each record indicating its type and subtype:
‘C’:Accounts opened in banking or credit entities located abroad.
- Current account.
- Savings account.
- Term deposits.
- Credit accounts.
- Other accounts.
·»V»: Securities or rights located overseas representative of participation in any type of legal entity, values located overseas representative of the transfer of capital to third parties or provided for its management or administration to any legal instrument, including trusts and «trusts» or mass though lacking legal personality, capable of acting in the course of trade.
- Values or rights of participation in any type of legal entity. As shares and participations in companies.
- Representative values of the transfer of capital to third parties. Bonds …
- Values provided for its management or administration to any legal instrument, including trusts and «trusts» or mass heritage which, though lacking legal personality, capable of acting in the course of trade
· ‘I’: shares and participations in share capital or equity fund of collective investment institutions located abroad. In this case there is no subtype.
· «S»: life insurance (savings not risk) or disability and pension time or annuities, whose insurance companies are located overseas.
- Insurance life or disability, whose insurance company is located abroad.
- Temporary or life income generated as a result of the deposit of capital, abroad.
· «B»: ownership and real rights over properties located abroad.
- Ownership of the property.
- Actual use or enjoyment and bare ownership rights over real estate.
- Timeshares, timeshares shifts, part-time property or similar formulas on real estate.
- Other rights in rem over real estate. In this case you must describe it.
It must file a return if any of those paragraphs (1:C, 2:V, I, S, or 3: B) exceds the figure of 50,000 euros, and only those sections in which the figure is over 50,000 euros.
Information to provide
Information to supply include, open accounts in financial institutions, the balances of these accounts on December 31st, the average balance for the last quarter of the year and the date of opening. All holders, authorized… at 31 December shall declare the balance at 31 December and average balance. … Authorized holders who have ceased to be during the year, indicate only the balance of the day ceased to be holders, authorized…
In terms of the ownership of the account should be indicated if the declarant is:
- Holder
- Representative
- Authorized
- Beneficiary
- Usufructuary
- Taker
- With power of disposal
- Other forms of real property
In the case of Real Estate shall include the date and the value of acquisition, and the date of opening or cancellation of right over Real Estate and, in the case of values, rights, insurance and income deposited or managed abroad, the balance at 31 December of each year. And where appropriate the amount of transfer or sale.
The breach of this obligation has consequences on income tax and corporation tax.
Assets not declared, that cannot be proved its ownership arousing from declared income or assets, will be considered income to be taxed, and a 150% punishment over the value of them.
Penalty for not filling, filling incomplete, filing with non accurate data, will be punished with 100 euros per data with a minimum of 10.000 euros.
Cooperation with other States
On the other hand, Royal Decree approved today partially to Spanish law transposes the Community directive on administrative cooperation in the field of taxation. Thus, reinforcing cooperation in the exchange of information between countries needed for the liquidation of taxes.
Among other issues, is attributed to the tax agency competition to formulate requests for mutual assistance to other States or international organizations. This provides legal security to be achieved greater agility in the process of mutual assistance.
And already a few years ago the tax agency began to provide tax information for citizens of the EU to their respective countries through the model 299 which is filled by Spanish financial institutions, collected and processed by Tax Authority, and information send to respective countries.
The Government aims to deepen in the coming months in this type of agreements for the exchange of information, both to improve the collection of taxes, and to enhance the fight against tax fraud.
Example of filling in data for a current account
Frequently asked questions:
Important note: the obligation to submit a declaration in the case of co-ownership of a good, relies on the value of the asset, not in the value of the percentage owned.
the following questions and answers are taken from the AEAT website:http://www.agenciatributaria.es/AEAT.internet/Inicio_es_ES/La_Agencia_Tributaria/Campanas/Declaraciones_informativas_2012/_INFORMACION/Ayuda/Preguntas_frecuentes__Modelo_720/Obligacion_de_declarar/Obligacion_de_declarar.shtml
1.-Must be filed a Form 720 when ownership of a bank account abroad is shared and whose balance at 31 December exceed the €50.000, but whose ownership corresponds to several people?
- There is a reporting obligation on the bank account when this limit is exceeded (if none of the other exceptions to the obligation to declare apply) regardless of the number of the account holders. Must be informed total balances, indicating the percentage of participation.
2.-Must be filed a Form 720 when sharing ownership of Real Estate located abroad whose acquisition value exceeds the €50,000, at 31 December but whose ownership corresponds to several people?
- Yes, there is a reporting obligation on the property when this limit is exceeded (if none of the other exceptions to the obligation to declare apply) regardless of the number of owners. Must be informed total acquisition value, indicating the percentage of participation.
3.-If a person ceases to be authorized in an account of a financial institution located abroad on June 2012 must file form 720? in that case, which has to be balance and the date to be reported?
- There is obligation to declare if the balance that existed in the account on the date of the revocation of the authorization, if happened by the end of year would had determined obligation to declare by 31 December.
- The content of the Declaration in connection with this account in the event that there is obligation to declare it must inform about:
- Business name or full name of the Bank or credit as well as his home.
- The complete identification of the account.
- The date of the revocation of the authorization.
- The account balance at the date in which I leave be authorized.
4. Do I need to declare pension schemes contracted abroad?
- There is no obligation of information about pensions plans (for contributions to them or capital into them) as long as is not fulfilled the requirement that is covered by the scheme and capital is withdrawn.
5-When an individual moved abroad once started the exercise and must file the tax on the income of natural persons by this exercise. Are you required to file also the information model with respect to the property and rights abroad?
- Yes, provided in accordance with the regulation of these three obligations of information is obliged to fill form 720
6.- If a person is the «owner» of an account abroad whose balance at 31/12 is € 40,000 and is also «authorized» in other current account whose balance at 31/12 is €30,000, there is obligation to declare?
Yes, provided that no if no cause of exoneration.
7. Form Field «Tax Number in the country of fiscal residence». There are no instructions what should be put in this box?
The instructions on how to fill concrete boxes are in the link that is up on the design of the model 720 records:
- It will indicate the tax identification number of the entities declared in the previous field, assigned in the country or territory of residence tax.
- This field will be blank when the «type of asset» take the value «B».
Example: in the case of an account in the Bank Espirito Santo of Portugal, will be the VAT Number of this entity in Portugal.
8. Do I need to declare asset which have been sold during the financial year, and before 31 December has been reinvested in other assets?
No. When the loss of the status of owner or real owner referred to in the last paragraph of article 42 ter.1 have his origin in the transmission of values and rights, and the amount obtained had been entirely used in the acquisition of other securities or rights which must be declared, You only must declare balances at 31 December.
9. What exchange rate is used to value goods in foreign currency?
- The European Central Bank official exchange rate will be used at December 31, for the balance at 31 December and for converting into euros fourth quarter average balance. BOE-Bank of Spain resolution
- In the case of cancellations of accounts, the official rate on the date of cancellation will be used.
- In the case of real estate, the value of acquisition, as well as in the rest of goods and rights subject to Declaration, must conform to the exchange rate prevailing on the date of December 31 for the year corresponding to the declared information.
462 comentarios. Dejar nuevo
In the case of UK nationals moving to Spain and becoming resident in Spain how should their previously acquired UK tax exempt ISAs be treated for Spanish IRPF purposes?
@Adrian
Citizenship is not important for tax purposes. What´s important is Fiscal Residence.
Being legal Spanish resident does not imply to become a fiscal Spanish resident.
The Agreement for avoiding double taxation, determines when, by any reason a person is a fiscal resident of both, U.K. and Spain, then his status shall be determined in accordance with the following rules:
(a) He shall be deemed to be a resident of the State in which he has a permanent home available to him. If he has a permanent home available to him in both States, he shall be deemed to be a resident of the Contracting State with which his personal and economic relations are closer (center of vital interests);
(b) If the State in which he has his center of vital interests cannot be determined, or if he has not a permanent home available to him in either Contracting State, he shall be deemed to be a resident of the State in which he has an habitual abode;
(c) If he has an habitual abode in both Contracting States or in neither of them, he shall be deemed to be a resident of the Contracting State of which he is a national;
(d) If he is a national of both Contracting States or of neither of them, the competent authorities of the Contracting States shall settle the question by mutual agreement.
If you are a UK fiscal resident, you will be taxed in UK for your world income, and you will keep your UK allowances and exemptions.
But if you are a Spanish fiscal resident, you will be taxed in Spain for your world income, and you will have the Spanish allowances and exemptions, but no the ones you were used to have while you were UK resident, like ISAs.
When you are resident of one country, in the other you will be taxed as non-resident.
But, there is a popular solution, illegal but effective, declare in UK your UK income as resident, and in Spain your Spanish income as resident. This will minimize the risk of exchanging information between countries.
Hi Javier — For Modelo 720, what is the official formula for calculating the «saldo medio último trimestre» …I have been unable to find it on the Agencia Tributaria website.
Thanks,
Alan.
There is no offial formula.
Add up, money in the account at the end of the day for every day from 1/10-31/12 and divide by 92.
Hello Javier
I have been a Spanish resident since 2006.
I have a UK private pension plan with Aegon from which I am taking monthly ‘drawdown’ income. This income is paid gross in the UK and is declared in my Spanish tax return.
Do I need to declare this pension on the 720 form.
Yes, you need to declare it, as you are already withdrowing. It should be declared as insurance
i am a pensioner resident in spain since 2005 i own a property in england which i receive no income from the value approx 150.000 pounds i pay no tax in either u k or spain do i have to complete form 720
Hello Geoffrey,
Yes, as you are Spanish resident, you must fill form 720, because you have an asset that exceeds 50.000 euro.
Additionally, for individual income tax (IRPF) you must include as presumed income the following value = acquisition Price in Pounds X 50% X EUR/GBP on Dec 31st 2012 X 1,1%. This income will be taxed at your marginal tax rate.
Probably you will need to fill complementary tax returns for years 2008 to 2011, adding this presumed real state income.
If you need any help, you can call me. My phone number can be found in web page: contacto.
I moved to Spain in September 2012 and obtained residencia in February 2013. I am not yet registered with the Agencia Tributaria but will have to make a tax return in 2014 for 2013. As I was not legally resident until this year, do I have to make this declaration of assets for last year?
Hello Norm,
for tax year 2012, you were non resident in Spain, so you are not liable to fill form 720.
But, you will, next year.
I have an occupational pension, a ‘final salary’ pension which I started to draw before we became Spanish fiscal residents. The income from it is declared for tax each year and it was specified on our double taxation form. It is taxed as income not annuity. The only way I can get a financial value for it is to pay £350 for an actuarial valuation. Does this need to be declared.
Thank you for your other answers, I have been trying to find answers to those questions for some time!
Margaret, occupational pensions (like your final salary scheme) are not declared in form 720.
You just need to declare you pension in “work income” box in your Spanish IRPF tax return.
dear javier,(re yout no 8 above re declaring assets sold in year and re invested in 2012)
i wonder if you would kindly inform me regarding the following re form 720.
i sold some investments and some shares in the uk and some bonds ,i immediately transferred the proceeds to my prudential bonds which i hold in a trust fund in malta for my little boy, which iam going to declare on my form 702 together with the value of my trust fund, do i have to declare these shares ,investment etc ,when they will be included in the amount that i declare when i declare the value of my trust fund..your answer at no8 would suggest i dont have to declare them,is this correct, thans a milloion for your time..
Dear, Barry
When you sell assets and reinvest the money collected in other assets, that you declare this last ones in Form 720, you dont declare the original or previous assets.
This situation is answered by Agencia Tributaria in the following link:
http://www.agenciatributaria.es/AEAT.internet/Inicio_es_ES/La_Agencia_Tributaria/Campanas/Declaraciones_informativas_2012/_INFORMACION/Ayuda/Preguntas_frecuentes__Modelo_720/Valoracion_de_los_bienes_y_derechos/_Es_necesario_reflejar_en_el_modelo_720_la_informacion_sobre_todos_los_valores_respecto_de_los_que_se_ha_perdido_la_titularidad_a_lo_largo_del_ejercicio_y_antes_del_31_de_diciembre_en_aquellos_casos_en_los_que_dicha_perdida_de_titularidad_se_produc.shtml
The other question about Real Estate bought in 1971, and sold in 2012, this capital gain has a reducction of 100% of the capital gain obteinded from 1971 to 2005, and you will only pay taxes for capital gain from 2006 to 2012.
LEY 35/2006 DEL IMPUESTO SOBRE LA RENTA DE LAS PERSONAS FISICAS
DISPOSICIÓN TRANSITORIA NOVENA. Determinación del importe de las ganancias patrimoniales derivadas de elementos patrimoniales adquiridos con anterioridad a 31 de diciembre de 1994.
1. El importe de las ganancias patrimoniales correspondientes a transmisiones de elementos patrimoniales no afectos a actividades económicas que hubieran sido adquiridos con anterioridad a 31 de diciembre de 1994, se determinará con arreglo a las siguientes reglas:1.En general, se calcularán, para cada elemento patrimonial, con arreglo a lo establecido en la Sección IV, del Capítulo II, del Título III de esta Ley. De la ganancia patrimonial así calculada se distinguirá la parte de la misma que se haya generado con anterioridad a 20 de enero de 2006, entendiendo como tal la parte de la ganancia patrimonial que proporcionalmente corresponda al número de días transcurridos entre la fecha de adquisición y el 19 de enero de 2006, ambos inclusive, respecto del número total de días que hubiera permanecido en el patrimonio del contribuyente.
La parte de la ganancia patrimonial generada con anterioridad a 20 de enero de 2006 se reducirá de la siguiente manera:
a.Se tomará como período de permanencia en el patrimonio del sujeto pasivo el número de años que medie entre la fecha de adquisición del elemento y el 31 de diciembre de 1996, redondeado por exceso.
En el caso de derechos de suscripción se tomará como período de permanencia el que corresponda a los valores de los cuales procedan.
Si se hubiesen efectuado mejoras en los elementos patrimoniales transmitidos se tomará como período de permanencia de éstas en el patrimonio del sujeto pasivo el número de años que medie entre la fecha en que se hubiesen realizado y el 31 de diciembre de 1996, redondeado por exceso.
b.Si los elementos patrimoniales transmitidos fuesen bienes inmuebles, derechos sobre los mismos o valores de las entidades comprendidas en el artículo 108 de la Ley 24/1988, de 28 de julio, del Mercado de Valores, con excepción de las acciones o participaciones representativas del capital social o patrimonio de las Sociedades o Fondos de Inversión Inmobiliaria, se reducirá en un 11,11 % por cada año de permanencia de los señalados en la letra anterior que exceda de dos.
c.Si los elementos patrimoniales transmitidos fuesen acciones admitidas a negociación en alguno de los mercados secundarios oficiales de valores definidos en la Directiva 2004/39/CE del Parlamento Europeo y del Consejo de 21 de abril de 2004 relativa a los mercados de instrumentos financieros, y representativos de la participación en fondos propios de sociedades o entidades, con excepción de las acciones representativas del capital social de Sociedades de Inversión Mobiliaria e Inmobiliaria, se reducirá en un 25 % por cada año de permanencia de los señalados en el párrafo a anterior que exceda de dos.
d.Las restantes ganancias patrimoniales generadas con anterioridad a 20 de enero de 2006 se reducirán en un 14,28 % por cada año de permanencia de los señalados en el párrafo a anterior que exceda de dos.
e.Estará no sujeta la parte de la ganancia patrimonial generada con anterioridad a 20 de enero de 2006 derivada de elementos patrimoniales que a 31 de diciembre de 1996 y en función de lo señalado en los párrafos b, c y d anteriores tuviesen un período de permanencia, tal y como éste se define en el párrafo a, superior a diez, cinco y ocho años, respectivamente.
2.En los casos de valores admitidos a negociación en alguno de los mercados regulados y de acciones o participaciones en instituciones de inversión colectiva a las que resulte aplicable el régimen previsto en las letras a y c del apartado 1 del artículo 37 de esta Ley, las ganancias y pérdidas patrimoniales se calcularán para cada valor, acción o participación de acuerdo con lo establecido en la Sección IV, del Capítulo II del Título III de esta Ley.
Si, como consecuencia de lo dispuesto en el párrafo anterior, se obtuviera como resultado una ganancia patrimonial, se efectuará la reducción que proceda de las siguientes:
a.Si el valor de transmisión fuera igual o superior al que corresponda a los valores, acciones o participaciones a efectos del Impuesto sobre el Patrimonio del año 2005, la parte de la ganancia patrimonial que se hubiera generado con anterioridad a 20 de enero de 2006 se reducirá de acuerdo con lo previsto en la regla 1 anterior. A estos efectos, la ganancia patrimonial generada con anterioridad a 20 de enero de 2006 será la parte de la ganancia patrimonial resultante de tomar como valor de transmisión el que corresponda a los valores, acciones o participaciones a efectos del Impuesto sobre el Patrimonio del año 2005.
b.Si el valor de transmisión fuera inferior al que corresponda a los valores, acciones o participaciones a efectos del Impuesto sobre el Patrimonio del año 2005, se entenderá que toda la ganancia patrimonial se ha generado con anterioridad a 20 de enero de 2006 y se reducirá de acuerdo con lo previsto en la regla 1 anterior.
3.Si se hubieran efectuado mejoras en los elementos patrimoniales transmitidos se distinguirá la parte del valor de enajenación que corresponda a cada componente del mismo a efectos de la aplicación de lo dispuesto en este apartado 1.
Hi Javier, Thanks for the previous answer. I understand that each bank account is identified by its IBAN. I have savings accounts without IBANs – the bank says they are not needed as money can only be transferred in and out through the current accounts we hold with the same bank. Can the software cope with this?
Hi Margaret, when you have an account in one of the more than 80 countries that uses IBAN you should identify account by IBAN, in this case in form 720, you will codify this by setting field “Clave de identificación de cuenta” with value: “I”. In cases, like accounts in USA, where IBAN is not used within the country, you should codify this with code «O», and the account number in the country.
my wives mother died late last year and left her house to my wife. The probate was cleared in February this year, does this need to be declared as the probate was after the cut off date.
Carl, you legalized will and inheritance this year but effect goes back to the date of death. So, when your wife accepted inheritance this year, the effect, is that she become owner of the house on the date of death.
Because of that, your wife needs to fill form 720.
thank you for your reply. One more question, as the house is now on the market for 200,000 pounds would there be tax due in Spain when it is sold? There is no tax payable in the UK as it is under the Inheritance Tax threshold. We are both resident tax payers in Spain.
Yes, will be tax due in Spain. Tax base will be selling price minus price declared for inheritance.
thank you again, not sure I understand, the amount we filled on the probate form was 190,000. This is under the 325,000 amount for UK inheritance tax so there is nothing to pay in the UK. Are you saying the tax would only be on the amount over 190,000?
Carl, there are two issues:
1.- Inheritance tax. Residents in Spain are taxed for inheritance, some regions like Madrid are almost exempt. Tell me where do you live, so I can estimate tax in your Comunidad Autonoma.
2.- Capital gain when she sells the house, will be selling Price minus acquisition Price (inheritance Price).
thank you. I sent a message yesterday saying we lived in Tenerife but it seems to have got lost. If you would be able to give us an idea of what taxes would be due it would be a great help.
Inheritance in Canarias, for your case could be around 28,000 euros.
Give me a call.
we live in Tenerife.
Hi Javier.
I became a Spanish resident in March 2011 and have work for a Spanish company since then. Before March 2011, I worked for a US company and have a retirement account of more than 50,000€, have a mutual fund account of more than 50,000€, and an apartment purchased in 2008. I also have a savings account of less than 50,000€ and a stock trading account of less than 50,000€. All were obtained with money I earned in the US and I continue to pay taxes every year (tax years 2011 and 2012) in the US for any interest or capital gains. I rent the apartment but has not earned money in the last two years.
As I understand, I need to declare the retirement account, the mutual fund account and the apartment but not the savings account or stock trading account. Will I need to pay any taxes on these accounts?
Thanks for your help.
Hi Adam,
First of all. Where are you tax resident in US or in Spain?
You have all your US financial products under a US TIN. Is it right?
Retirement account. What is this a 401k?
Mutual found. What is this, explain please?
Stock trading accoun. You have it, with a bank? with a Broker?
US and Spain have a tax system of world income for 1042 or IRPF.
If you were, Spanish tax resident, in form 720, you need to declare, for sure, apartment.
Hi Javier,
You seem to be helping a lot of people through your blog so well done.
My wife and I live in Spain but pay out taxes in the UK. We have a property in the UK, ( bought for £56K value now £120K which provides a small rental income and some ISA’s. We are not yet Fiscal residents in Spain, do we need to complete the 720: and if so should we expect to pay tax in Spain?
Hi, Stuart, if you were nonresidents in Spain in 2012, you don’t need to fill form 720.
You will be considered resident in Spain when you spend in Spain more than 183 days of a calendar year.
For filling form 720, real estate value will be acquisition value.
We have a few bank accounts in the uk. The total is above the 50,000 for each of us. So i understand we will have to register them as assets. These are relatively recent due to shopping around for the best rates of interest. So some are 1 , 2 or 3 years originally. but as one finished we opened another with another provider. Also, they have been switched between husband and wife. We have been residence of spain for 8 years.
The money was part inheritance (which the tax was paid) and the sale of our primary residence (no tax due) in the uk before we came to Spain, which we can prove, but are we going to have to get proof of all the asset transfers we have done from prevous banks as evidence which could be quite a job to contact them all. Also, the orginal amount has dropped over the years due to us using the savings for living expenses.
Yes, in that case you need to declare them as accounts.
You just need to declare the last one, and may be the ones closed during 2012, if there are some.
Fantastic blog by the way. Great work.
Re Modelo 720
You replied to «geoffrey dyson» (marzo 10, 2013 en 5:52 pm) indicating that he would have to ….
A. Declare his 150.000 property on the 720 and
B. pay a «presumed» income tax also (Value X 50% X 1.1% converted to Euros ).
However, is it not true (with regard to the 720 and «penalties») that…..
A house worth €150,000 is not declared in year 2012 return. If this is found out in year 2014 the total to be paid including interest and penalties in 2014 would be €95,931.20.
This will only be avoided if the taxpayer can prove that those rights or assets were acquired:
– With declared income, which would include income regularized by “special tax return” regulated in the first additional provision of Royal Decree-Law 12/2012, also known as “tax amnesty”.
– With income earned in tax years in which the tax payer was not a taxpayer in Spain of the Personal Income Tax respectively.
Taking the last paragraph, if «geoffrey dyson» had bought his property whilst he was in the U.K. and was a U.K. taxpayer and the monies he used were therefore declared and «tax paid» in the U.K., he WOULD NOT need to declare his property on the 720 ?
And that (with regard «presumed income tax») if his mortgage (assuming there is one) was not covered by his rental received, he would not be liable for income tax at all ?
There are two issues:
1.- Form 720. If you don’t declare real estate, penalty will be 10.000 euros.
You must declare all your assets abroad if you were Spanish resident year 2012.
2.- Income Tax. Because real estate was not declared in form 720, Tax Authority is allowed to presume than 100% of the real estate value is a capital gain; unless you can probe that money used to buy property arises from a declared income.
Mortgage: that part of the acquisition Price paid with mortgage, of course will never be presumed to be from a non-declared income.
Hi Javier,
Reference to my last email (which i rambled a bit)
My question is:
We have bank acounts in the uk that are more than the €50k so we will need to be declared them. But what happens then, as all of them were reinvestments from expired investments. ¿Are we going to need to have proof for all prevous transactions and indeed proof of where the money origially came from? (which in our case was from inheritance while residence in the uk from some 10 years ago)
In form 720, you will declare accounts open on December 31th 2012. And the accounts closed during 2012. No document will be attached to form 720; but you should save this documents, in case you were required.
Hi,
I am trying to find Form 720 to complete online. Can you please send me limnk.
Many Thanks
Eric Berg
https://www.agenciatributaria.gob.es/AEAT.sede/tramitacion/GI34.shtml
Javier. You are advising people that occupational pensions paid in the UK including final salary schemes are not needed to be declared on Modelo 720 even if they are declared to the spanish tax authorities. This according to the latest information given to me is not correct. Can you confirm which is the procedure.
Derek
You dont need to inform about pensión scheme, in form 720
But you need to declare your income from it, in your individual income tax.
Javier. Further to my earlier query, can you advise what the calculator is for submitting pension information on Modelo 720. ie-: from GBP to Euros etc.
Derek
The oficial Exchange rate for EUR/GBP, from European Central Bank on Dicember 31st 2012, that was 0.8161
Hi Javier,
Can you help me out?
I moved to Spain in October 2011. I have a house with acquisition value of £110.000 but my mortgage is still over £90.000.
I am renting it out for £380 per month.
Can you tell me what I have to declare? I’m not sure what to do. Does the fact that I have a mortgage matter?
Do I have to declare any amount due to the acquisition value of the house?
Do I have to declare anything for the total amount of rent? I already declare the rent to the UK, so I’m getting worried about getting taxed twice.
Would really appreciate your help with this.
Thank you so much!
Markus
Markus:
You need to fill form 720, for the house. Mortgage is not declared in this form. Acquisition value, is the value to declare in this form.
Rental income, must be declared un your IRPF( individual income tax). For avoiding double taxation you are allowed to deduct UK tax, from the amount to pay in taxes in Spain.
Javier,
Is this general or just on rental? I thought we had to pay the tax in Spain and claim it back from the UK? I’ve filled out double taxation forms for my main income so don’t pay tax in the UK but for some things (small amounts of bank interest for example) I just pay tax in both countries as its not worth the trouble for a few pounds.
In UK you can claim back withholding that exceeds 15% on interest and dividends.
In Spain, when you pay individual income tax, from the amount to pay you will deduct what you paid in UK, as deducting for international double taxation. In this way you avoid being double taxed.
Hi Javier,
So, with regard to overseas property/real estate.
All overseas property/real estate must be declared on the 720, even when a overseas property/real estate was aquired when not a Spanish taxpayer.
…even when the overseas property/real estate was aquired with «tax paid» monies in that overseas country ?
1. I only rent a place here in Spain whilst I work and pay income tax on my earnings.
2. My «sole property» is my «overseas property/real estate» does not have a rental profit/income.
3. The property is in «negative equity».
Therefore, should I inform my mortgage company that I have declared my property on the Spanish 720….as Spanish tax authorities could apply a «future property taxes» or penalties to me, which would mean I may I would not be able to meet mortgage payments resulting in a loss of my house ?
(in the small print of my mortgage I have to declare interests by others in the property title).
Yes, overseas property must be informed in form 720.
For your individual income tax you can state that your permanent house is the house abroad, so you will not pay taxes on it.
Mortgage company, knows that in any country you are resident you will be taxed for capital gains in your house when you sell it, I think you don’t need to inform them.
Hi Javier,
I have a house with acquisition value over €50,000.
I rent it out for a monthly rent of less than €500 per month.
I am paying a mortgage on the house and I wonder if the amount I still have to pay on the mortgage impacts what I have to declare at all.
Can you tell me what I have to declare? Is it just for the value of the house that it was on the day I bought it or something else as well?
I’m unsure the amount I have to declare as well. If the house cost €100,000 for example, can you tell me what I would have to declare in my situation?
Thanks a lot 🙂
For form 720, mortgage is not included. Value to declare is acquisiton Price.
For individual income tax, interests deducts from rental income, as well as other expenses for the property.
Hi Javier
Great Blog.
I am right in thinking that UK Premium bonds from the UK government owned National Savings and Investments would be declared under section 2I as would a fixed term investment bond with returns linked to the UK FTSE 100 contracted through a UK bank (as broker) but ultimately invested with a UK insurance company?
Also that, as my wife’s and my overseas bank accounts and bond investments are in joint names (50% ownership), even though no one investment or bank account holds 50,000€ and our individual ownership of each asset group totals less than 50,000€, we still need to declare all our overseas accounts and investments (including accounts that only hold 1€ to «keep them open») because the total of each asset group held jointly exceeds 50,000€.
For example, say we have three overseas joint accounts of which we both own 50%, one account with 24,000€ in it; one with 30,000€ in it; and the other with 2€ in it – we need to make a declaration even though no one account has 50,000€ in it, the total of individual ownership is less than 50,000€, but because the total of the joint accounts exceeds 50,000€. We each have to declare the three individual accounts totalling 54,002€ with 50% ownership – or am I wrong?
Steve,
Bonds: if you have a contract with insurance company, probably it will be treated for form 720 as insurance (like a unit-linked). But if the Registry References of the bonds are under your name (not on the name of the insurance company) should be declared as bonds (cesiones de capitales a terceros).
If the group assets exceeds in value 50.000, you need to declare all assets in the group, including even assets for 1 euro.
In your example, total amount in accounts exceeds 50.000, so you need to declare de 3 accounts. Your part in the accounts adds 27.000,50 euros, but obligation is for the value of the assets where you participate, which is 54.001, so you and your spouse need to fill form 720
Thank you very very very much!!
Hi Javier, thanks for all the help your blog is giving. So many of us are worried about this – not worried that we have to declare but worried about getting it wrong!
I think I am now clear for this year. We have no property outside Spain, our income is from State and occupational pensions. We have only a small amount (<5k) in shares and bonds, but we do have one joint bank account which individually is over 50k and other, smaller, accounts. Though most of these are held jointly, so we do not have more than 50k total each, our understanding is that we must complete a 720 for all bank accounts , but not the other two sections.
Is this correct?
My thoughts are now turning to next year, as we are in the process of restructuring our money.
I understand we only declare again if 'something' increases by 20k or more – but what, exactly, is that 'something'. Is it the overall sum, the sum in one bank account? If it is the sum in one bank account is that only an account that was already over 50k?
For example, we have one joint account with 55k in it, another with 10k in it, if we moved 30k from the first to the second would we have to complete 720 next year? Also, is the 20k counted at any time in the year or only in the last quarter or at year end?
Finally, if we put money into bonds, which we are thinking of doing, will we have to declare that section next year if we have more than 50k in bonds, or if the amount we have in bonds goes up by more that 20k in the year? e.g. what if we put 30k into bonds now?
best regards
Margaret
As you have a joint bank account over 50.000 you need to feel all bank accounts.
And other sections with information you provided, you don’t need to fill.
Pensions in general are not declared. Check this for pensions: http://jullastres.es/wordpress/?p=764
Next year you will need to declare if:
Real Estate owned abroad exceeds 50.000
Bonds stock funds… exceeds 50.000
Bank accounts if INCRESES BY 20.000 over previously declared total balance, because you already declared this section.
Hello Javier,
I have read all of your replies to various questions concerning the 720 form.
Concerning the fiscal information (NIF field) on the 720 form. For example, Canadain Banks do not have a NIF number. Is this field mandatory?
What information should I enter if my bank in Canada does not have a NIF?
Not, that field is not mandatory.
http://www.agenciatributaria.es/AEAT.internet/Inicio_es_ES/La_Agencia_Tributaria/Campanas/Declaraciones_informativas_2012/_INFORMACION/Ayuda/Preguntas_frecuentes__Modelo_720/Cuestiones_sobre_la_cumplimentacion_del_modelo/_Que_campos_son_especificamente_obligatorios_en_el_caso_de_que_se_declaren_cuentas___articulo_42_bis___C_.shtml
Thanks Javier,
But is it as easy as declaring a house at it’s aquisition value? Nothing else to take into consideration?
Thank youuu!!
Markus
Yes, its only an informative form, but you will also fill address and acquisition date.
Hola Javier
We have been residents for about 9 years and have a life insurance policy of approx 120,000 Euros based on current exchange rate with the UK. So I have to declare this.
But we also have bank accounts in joint or individual names of which none are over
50,000 Euros. If you add the value of the various banks accounts together these come to more than 50,000 Euros but in a mixture of joint and individual names, do these have to be declared.
Also I thought it was obligatory for residents to declare all assets in any other country no matter what the value is. Am I right in this and if so, should we not declare all bank accounts.
Also thanks for the very informative website.
Thanks Ian
In addition to above Javier, we have been told that we didn’t need to declare our UK assets in previous years by our Gestor here (I think this is not correct) and also we didn’t do any tax return for the first couple of years when resident, how do we best correct this.
Form 720, is a new form, so 2012 is the first year to declare.
Government cannot claim taxes older than 4 years, so, forget about 9 and 8 years ago. And you cannot pay even if you want.
Insurance is declared by value at 31st December 2012.
Accounts: add up your accounts (individual + 100% balance on joint) if exceeds 50.000 you need to declare all of them.
Do the same for your spouse to check if she needs to declare them.
With financial assets you have another limit of 50.000, add all them up, for checking if you need to declare them.
Hi!
If I was getting less than 25000 gross per year, do I still need to fill in the 720 form as spanish resident?
Thanks a lot for your help
Monika
Form 720 is about wealth by the end of year, but is not related to income.
If balance in accounts by the end of year exceeds 50.000, or value of financial assets exceeds 50.000, or acquisition value of real estate exceeds 50.000, you will need to fill form 720
Hi,
I moved to Spain in 2010 and have never declare any property as was not aware of that. Tax company I used has never asked this question. However I own property outside Spain and purchase value was higher than 50k€. Shall I expect any penalties if I declare it now? am I going to pay any additional taxes? I do not rent it.
Thanks
Regards
Max
Hello Max,
You need to fill form 720 for the property.
In your individual income tax you should declare a presumed income for real estate because you can use it (is not rented).
The amount to declare is calculated as a 1,1% of half of the acquisition value. And this amount will be taxed at your marginal rate.
You can present «complementarias» for the years you didn’t include this income, and if so there will no be penalties.
As you can see the amount to pay is not high.
Great, thank you for your response.
So I need to add 1.1% to my income in Spain and get this taxed.
What does it mean to present «complementaries»? Shall I use another form or just add more income to 2012 declaration?
What if I pay taxes (local taxes – not income tax) in the country where the flat is located?
Thanks
Regards
Max
Complementaria is the Word we use when you fill again the same form that was filled before correcting mistakes or omissions, and as result of this corrections arises a bigger amount of tax to pay
Ok, thanks it makes sense. However what to do if I do not have this form? Shall I ask them http://www.agenciatributaria.gob.es for meeting and fill that in?
one more thing, what if I paid taxes already outside of Spain (mendatory taxes in the country where flat is located)?
thanks
Regards
Max
If you dont need to fill, thats all.
taxes paid in the country of source, will be taxed again in country of residence. But agreement por avoiding double taxacion, states procedure for avoiding this double taxation. Procedure is carried by residence cauntry, that will:
Hi Javier. I own a holiday apartment in Spain, but I’m resident in the UK. Can you please confirm that Form 720 does not apply to me. Thanks.
Form 720 applies to Spanish residents.
As you are non-resident in Spain, you don’t need to fill this form.
My husband and I are residents. We have bank accounts in the UK. I have one solely in my name value about 40,000 euros and my husband has one in his name solely value about 30,000 euros. Neither of these comes up to the 50,000. So do we need to declare them. They are not in joint names. We have had them for some years.
Thank you for your help. Jane Corbett
In that case, no one needs to fill form 720, as they are not in joint names.
Javier,
Your website is excellent, here is another question, if I do not submit a 720 from as I beleive I am non resident for Spanish tax under the double taxation treaty tie breaker rules but at a later date Spain disputes my status and decides I am resident and the UK agrees because the permanent home definition can be missinterperated. Then it presumably would be a late return so is that 1500euros fine plus late interest etc. Or can all the assets be at risk as the form has not been filled on so they could charge 150% on all the assets thereby causing bankrupcy.
Basically what is the maximum fine for a late submission and how long can it be late for…months, years?
You can prove your non-resident status in Spain proving your resident status in UK.
Ask HMRC for a certificate of fiscal resdience. And if required in Spain show it, and you will have no problems in Spain.
Here you have a link to apply for it at HMRC:
http://jullastres.es/wordpress/?p=800
Hi javier,
This isn’t really about the 720 but this has got me looking critically at everything. We have a few shares. They were issued by companies who went public while we had an interest in them (e.g. an insurance policy) so they cost us nothing, we aquired them before we lived in Spain. We get about 100€ each year in cash dividends and 100€ in new share dividends (SCRIP). I notice one company ( a Spanish one) treats these differently for tax purposes. So my questions are
1. Are dividends treated differently if they are cash or shares?
2. When we come to sell them how will capital gains be calculated?
SCRIP dividends are not taxed, stocks received are treated as they were acquired in the same date as the stocks that originated them, therefore acquisition value of old stock is shared proportionally among all stocks (old + new) in other to determine acquisition value after SCRIP.
In your case as they were acquired by 0 euros, new ones are also considered to be acquired for 0 euros.
In other words, you will be taxed when you sell them.
So, fiscal treatment is almost equal to the one in UK
Javier,
Many thanks I do actaully have the UK certificate, recently obtained under the UK’s 91 days and over yearly prescence in the UK. It was just of concern as I have heard the Spanish Tax office are checking electricity readings which would show a period in Spain of over 183 days and I wondered if I would have to go into great detail regarding the double taxation treaty even though I have the certificate, do they really go into the depths of the treaty do you know or as you say the certificate maybe with an explanation will be enough, sorry to ask you again on this.
It’s just these high penalties are scaring everone and especially me, i have even thought of submiting the form just to be on the safe side.
Yes, but this readings are a PRESUMPTION on residence.
And presumption admits to probe the opposite. And the accepted probe is this certificate of fiscal residence
Javier,
Once again thankyou, after all the questions you have answered all that remains for me to ask is one final question.
Do I definitely not submit the form 720 as I am UK resident under the double taxation treaty tie breaker rules and I have the UK tax certificate.
Even though I am in Spain more than 183 days and there is no mention of my situation in the AEAT questions and answers or seminars.
Only the standard statement ‘if you are in Spain more than 183 days you are resident’
Bill
Bill, article 9.1.a, of the Individual Income Tax (Ley 35/2006) says that you are tax resident if you spend more than 183 days in Spain, unless you prove your tax residence in other country.
What does the following actually mean?
There is no obligation of information about pensions plans (for contributions to them or capital into them) as long as is not fulfilled the requirement that is covered by the scheme and capital is withdrawn.
Stephen
When you are putting money into pension plan, generaly are not declared.
But when you are retired, and already collecting money from the pension plan, for income tax you need to declare this income. And for form 720, if money into fund was transfered to an insurance company, you need to declare money into insurance company.
Javier,
My wife and I have a joint account in a British bank which amounts to just under 40.000€. We also have a few shares worth about 3.500€, and we have no property in UK. So far so good, but I have a Stocks and Shares ISA currently worth about 18.000€. My question is – does this ISA count as type I or type C? If I understand correctly the ISA counting as type C would mean I would have to fill in the declaration. Thanks in anticipation.
The answer is with who you have your ISA, with a bank or with an insurance company.
If is a bank, the ISA will be supported by a bank account, so bank accounts will exceed 50.000
If is an insurance company, insurance adds with stocks, bonds… so there will be no need of filling form 720.
Hi Javier,
Great website – i was just wondring if you could help me with this one:
I own a 10% stake in the family business in the UK. I am living in spain and complete the IRPF as a regular spaniard. Do i need to declare the participation in this company? And if so, how do i know estimate whether the value exceeds the 50,000 limit?
Thnaks in advance,
Mat
Hi, Mat,
Your family company will have an account statement for the last closed fiscal year; from that statement you can obtain the accounting value of the company (assets minus liabilities) divide this account value by the total number of participations that company has and multiply the number of participations that you have.
Hola Javier,
I own a property in UK which I purchased in 1986 for less than 50000 euros although it is valued more than 50,000 euros now.Am I correct in thinking that I do not need to fill in form 720 as the acquisition value is less than 50,000 euros?
Hope you can assist.
Salud,
Tom
As you bought it for less than 50.000 you don’t need to declare it in form 720, regardless its value nowadays.
Hi Javier, thank you for the site it is very informative and you obviously know your stuff on the new form 720!
I have a question regarding this form as i have seen many questions regarding bank accounts and pensions but not much about Property owned outside of spain. I have some houses in the uk and they all have mortgages on, do i need to complete the 720 form if there is no equity in the properties? If i don’t have any equity its not really an asset more a liability?
If i do have to add the properties to the form 720 would i have to find a current valuation some how or just make a more or less valuation figure up?
Thank you in advance for any information!
Hi Oliver,
for this form you should declare the acquisition value, regardless it has mortgage or not.
Valuation is acquisition value, not current value.
As you can see, debts are not declared, so form cannot be used for tax your wealth, as do not include debts.
Javier,
Please can you tell me if you have to declare the value of an occupational pension? This is a final salary pension.
We have been told we must declare the notional value of it, but we do not know it. We have also been told that there is a formula to use to calculate the value using the age of the person and how much pension they are paid. Do you know anything about this?
Thank you very much for your help.
In form 720, you dont declare it. Unless you moved your money to another company (insurance), and you have an annuity.
Tell me which one was you pension fund? and who is paying you now?
Hi Javier
Yet another question concerning form 720:
My partner and I have a joint life insurance policy which we took out in the UK about 10 years ago. It is a whole life policy ie it only pays out only upon death of either or both parties and is only valid for another 8 years or so when we will stop paying premiums. There are no other benefits to this policy. Am I correct in believing that we do not have to declare this insurance as there is no income to be derived from it?
Many thanks.
If that insurance is just covering a risk, you dont declare it.
But if it is a saving product, you should declare it.
Hi Javier,
Thanks for this great site.
Above it says
«Information to provide
Information to supply include, open accounts in financial institutions, the balances of these accounts on December 31st»
Does that mean that if the account was open on December 31st but is now closed it does NOT need to be declared ?
Thank you
Regards,
Jessy
Not, when law says open accounts, means: open accounts by the end of the year.
Hi
Must congratulate you on the site it is very helpful indeed.
My wife and I are Spanish residents but have no assets abroad except for a Portfolio of shares worth at present about 110.000 UK pounds. I have to declare this under the new law I know but is it easier to go to a Tax Assasor as the 720 I find complicated and confusing.
Many thanks
Yes, you need to fill form 720.
You should declare one by one all your stocks, funds…
If you need some help, you can call me at 670720457
Javier
I have a cash balance in my Stockbroker account at 31.12.12?. How should I report it on the 720 form.
Also I have funds in an Private Pension plan.. I have made no withdrawals of capital or income yet – does that need to be reported?
Cash in your bróker must be declared if together with other accounts abroad, excedes 50.000 euros.
Pension fund is not declared.
Hi Javier,
Thanks for the information you have provided here on your website. It has helped me a great deal. I think I now understand enough to fill out the form. I have two small questions though:
1) Regarding the field ‘Persona con quién relacionarse’. Do I repeat my name here, or should I put my wife’s name?
2) Regarding the field ‘Clave reprepresentación de valores’. Am I right in understanding that option A – ‘Valores represantados mediante anotaciones en cuenta’ is the correct choice if my shares are held in a share dealing account, and that option B, refers to shares for which I have a paper certificate?
Thanks for your help.
Matthew
1.- chose the one who speaks better Spanish.
2.- share anotadas en cuenta are all negotiated in some market. Non negotiated ones, or even physical ones are NO anotadas en cuenta.
Hi Javier,
Thanks for your response!
Matthew
Thank you for this useful blog. How do I declare stocks held in «street name» through a Brokerage Service in the US? My understanding is that I should declare each stock individually, providing its ISIN (having converted the CUSIP to an ISIN), and giving for «entidad» and NIF those corresponding to the company in which I own the stock, not the brokerage. Is that correct?
If there is not ISIN, you should declare address of the company whose stock you own. But if you declare ISIN, you can substitute this details for bróker details.
Thank you for this information. My question is this: if I own (jointly) a house in Spain and am resident in Spain and I sell a house in the UK – do I have to pay capital gains tax on any profit made above the original price of the house in the UK?
Thank you!
Yes, you need to pay for the gain in Spain.
But there will be a big exemption if the house was bought before 1994.
What percentage is the capital gains tax? Thanks again!
(bought after 1994)
reduced rate for capital gains, aplies only for assets acquired before 1995
Last year was increased.
Now is:
up to 6.000 euros: 21%
from 6.000 to 24.000: 25%
over 24.000: 27%
Government says that next year will go back to flat rate of 21%.
Am I correct in thinking there is an exception on capital gains on your main home in some cases? Dependent on your age and the length of time you have owned the house? What is the age and time limit please? And what happens in the case of a jointly owned house if only one of you is over the age limit?
Capital gains are
completly exempt for your permanent residence if you are 66 or older.
completly exempt for your permanent residence if you reinvest all liquidity obtained from selling old residence in buying new one.
jointly owned, each one calculates exemption for his/her half.
partizly exempt if asset was bought before 1995 (not only real estate, also stocks bonds funds…)
Hi Javier
Thanks for the useful site. Is this information required for Wealth Tax?
If it is, are the allowances the same as pre-2008 eg €700,000 per person plus €300,000 for one’s residence?
If not, what is it required for?
Jeremy
2007 is already expired.
From 2008 to 2010 there was a 100% allowance on wealth tax, and there was not even need for filling it.
If you exceed the 700.000 limit, you will need to fill wealth tax in 2011 or/and 2012.
But even if in form 720, value exceeds 700.000, it is possible that you don’t need to fill wealth tax, because for wealth tax you can deduct your debts. And in form 720 debts are not declared.
Javier,
Thanks for the great site and your helpful answers. Here’s my question:
I own a real estate abroad (value >50 kEUR) that I had bought well before becoming resident in Spain (therefore, with income earned in tax years in which I was not a taxpayer in Spain). I pay local (community) tax for that real estate. I do not rent it out.
1. Do I have to declare it in Form 720?
2. Do I still have to pay a “presumed” income tax (IRPF) on [Value X 50% X 1.1%] despite paying local tax on it? Does it change anything that it is a community tax, not an income tax?
2a) If I do have to pay IRPF on it, should I pay it for every single year that I am resident in Spain (by filing a «Complementaria» for every year that I have spent in Spain without declaring this real estate)?
2b) If I do not have to pay IRPF on it, which is the legal source for this exemption (for my references)?
Thank you so much in advance
As now you are Spanish resident you need to fill form 720.
Local tax is equivalent to Spanish IBI, but also you need to declare in IRPF (income tax) this presumed real estate income.
You should declare for all the years you were Spanish resident and are not yet expired. Not expired tax years are 2008 2009 2010 and 2011.
Hello Javier,
I found the information here very good, however I haven’t been able to find out, even from my own solicitor if I need to submit the form 720. My situation is this:-
British national working in middle east , have residencia certificate, due to house in Spain. Do not spend any more than 2 weeks in Spain a year. Only asset mentioned in the list amounting to about 50,000 euros is in fact a house owned by my wife. Not allowed to have in my name as its in Thailand.
Do I need to submit form 720? just declaring what I do have?, if I do how do I do this in Oman where I am now?….
Hope you can help. Thank you.
Having a residence permit in Spain, granted as you are a EU citizen, does not meen that you are tax resident in Spain.
Form must be filled by Spanish tax residents.
As you have a house in Spain, best way to avoid presenting form 720, is to fill form 210 for declaring property presumed income as non resident. And at the same time ask in your country in middle east a certificate of tax residence.
Thank you for your reply Javier.
How can I get a form 210 here in Oman and where to submit, do you know if I contact the Spanish Embassy here that they would be able to deal with this?.. Steve.
Hi Steve,
you can fill online, and print it in pdf for presenting.
https://www2.agenciatributaria.gob.es/es13/h/ie02100b.html?idi=en
But if help is needed you can mail me, I can present it for you.
Javier,
Many thanks for this excellent web page. I have a question about a portfolio my wife and I own. It has three different securities each of which individually are worth less than €50 000 but collectively are worth more than that amount. The first fund is a mixed asset fund mainly invested in equities, the second is a freehold income trust and the third a cautious mixed asset fund. The portfolio is managed by one company. We do not receive a direct income from the portfolio until it either matures or we cash it in. Do we need to complete a model 720 declaration?
Yes, you do. First and third are declared as funds (V2) and second as trust (V3)
hi..if u have accounts outside the european union..do you have to declare them or are there any countries exempt from this? thank you
You need to declare, everything, anywhere.
On the 27/12/2012, the Catalan government lowered the level for exemption from the wealth tax to 500, 000 € for the fiscal years 2012 and 2013. The level in the rest of Spain remains at 700,000 €.
I have two questions as regards real estate:
I have among my assets the «bare ownership » of properties located in France. The person with usufructuary rights receives all revenues generated by these properties, declares their «full ownership», as required under French law, and subsequently pays the wealth tax on them in France. If I were also to declare these properties as part of my ‘patrimonio’ (their value at acquisition is 205, 000 €), combined with the other assets I have, I too would be liable for the Catalan wealth tax. Surely two separate people, albeit they declare in different European countries, cannot both pay wealth tax on the same property ?
Next question :
I co-own a house with my husband in France. The value at acquisition was 210,000 €. As we share the ownership, which amount will be taken into account when calculating my liability for the wealth tax: the total value of the house or the value of my share of the house (105, 000€) ?
And lastly,
Despite my assets I have an annual income of around 6,000 €. In France, the total taxation due (wealth tax included) must amount to no more than 75 % of income. Is there the same rule in Spain (or Catalonia?).
I would much appreciate your help.
Thank you.
You need to declare but from the amount to pay you can deduct the part of French wealth tax corresponding to bare property.
Value for the house is total value, 210.00, and at the end you tell that you have 50%
Yes. The rule is that income tax plus wealth tax cannot exceed 60% of your income. If 60% limit is exceeded, you will reduce wealth tax until what firs happens 1.- limit is fulfilled
2.- or reduction on wealth tax reaches 80%
I am not retired. I moved my UK pension to an off-shore insurance company. They are the owner and I am the beneficiary. I am not taking any income. Do I need to declare it.
Yes as insurance (clave S. seguros, sub clave 1) for the surrender value
In English this time.
Thank you for this excellent and very useful forum.
I have filled out the declaration, and once I have uploaded it I get a message informing me that I can sign and send the form.
When I do it the message doesn’t go through and I am notified of a failure by means of the following message:
Failed to mount: «undefined» is not an object
Time is running out and I’m starting to get worried.
Any suggestions, please?
search «configurador AEAT» and excute this program, seams that electronic signature is not working.
If configurador solution do not Works, send to me the file ending .720 (file produced when you press EXPORTAR) and I will present it for you.
Thank you for a great source of information regarding filling in modelo 720.
I have had 2 differing opinions for the treatment of an English interest in possession trust, where the trustees are UK resident and the beneficiaries are Spanish residents, and I wonder what your opinion is. The beneficiaries have no rights to the capital, only to income generated from that capital. Should the assets held in trust, and legally the property of the trustees, be declared?
Potential Beneficiary (you will be beneficiary in the future), do not declare.
but if you are already effective beneficiary, you declare a value equivalent to capitalization at 4% of income received last year.
In this case you declare the trust, for capitalized value, and you dont declare any of the trust assets.
Thank you for your reply. Very much appreciated.
Hi Javier,
Seems like I have been presenting the borador della renta by mistake for the last 4 years because I worked only for 1 month in spain but I never gave up my residence in
Uk as I spend only few months each year here in spain.I live in a rented house while in spain and have resident bank accounts here as well.
shall i get a certificate of fiscal residence in uk and present it to agencia tributaria along with a letter explaining this misunderstanding or I should fill up the module 720?
thanks,
david
get this certificate from HMRC, and this year dont make the mistake of filling borrador. Do that and dont fill 720
shall i get a certificate for 2012 or one for all the 4 years or both?
thanks again…
You want no to present form 720 for year 2012, get certificate for year 2012
You want not to pay taxes as Spanish residente one year, get certificate for this year.
Hello,
I would like to clarify, even if I am the owner of a property, but have a mortgage outstanding that is approx 90% of its value, do I still have to delcare this? Im the owner but my actual capital is only 10k.
Thanks
Yes, even if mortgage is 100%.
Value to declare is the acquisition value, no matter if you paid cash o got a mortgage for 100%.
Excellent Q&A and very helpful.
re Form 720 I would be grateful answers on the following:
1) The form asks for valuations/bank balances as of 31/12/2012 AND the average value/bank balance during the last quarter. I have no problem providing the former, but the latter (average during last Q) are not provided in UK bank and investment valuation statements. Is it obligatory, or good enough to provide values for year end? If obligatory, where am I supposed to get this info? Do they really expect the average of 90 different stock prices in the case of equities/bonds/collective investment vehicles?
2) If I don´t have ISIN codes for each investment holding is it acceptable to give the number of holdings (no further detail) and the name and address of the broker who holds them in custody? eg XYZ broker, address, and 15 holdings
Thank you and looking forward to your reply.
Average balance is just for bank accounts.
brokerage accounts are not declared, what is declared in this case are individual assets within brokerage account.
Average balance for bank account: you can obtain ading balances by the end of Sept Oct Nov Dic and dividing by 4
2.- for assets, you need to fill a record for each one, with at least:
Thank you for your answers. As a further question to your answer on 2, average value during Q4 is not required? I was thinking of taking the values as at 30/9/13 (which I have) and 31/12/12 (which I also have), and dividing by 2, if necessary. But if not required at all that is great.
Average value is required for all accounts. take sept oct nov & dec add up and divide by 4
I am a bit muddled. In my your first reply to my questions of 22/4/13 you listed the information required for investment assets: (stocks/shares/funds) but average price during Q4 was not included in that list. I replied to that asking if your list meant average price is not a requirement, and your reply to that states that it is. Please clarify if obligatory or not. I had understood from your reply that they require it for bank balances, yes, but not for fixed income stocks/equities/investment funds. To get it is a lot of work which I don´t actually have time for except being up all night!! And I can´t see why they need it.
Many thanks,
average for Q4 is just required for bank accounts, but not for other assets
This is a really helpful site for the 720. Just one very specific question, I moved to Spain in January 2013 and will remain here for a year and a half. I started paying Spanish taxes in Jan 2013-do I still need to complete a 720 or would I need to do this next year?
Many thanks!
720, is for Spanish resident.
Now we are filling form 720 for year 2012, and as this year you was not resident you dont need to fill.
But next year you will need to fill during first term 2014 form 720 for tax year 2013 (in Spain tax year is calendar year)
I thought as much-however have been getting very mixed messages. Thank you for your response!
All the best.
This website / comments section has been a blessing – thank you
I would like you please just to confirm what we have to do with regards to shares and investment funds as I am a little confused.
I have a number of shares in UK companies and 5 investment ISA funds with a total value in excess of 50,000 euro.
How exactly do I present this? Am I expected to list each company, the number of shares and find what their value was as of 31/12/2012 or do we just give a total value for the UK shares and funds as a whole?
Retracing the steps back to 31/12/2012 is some work for each company.
when i press «subir» is that just uploading that section i have inputted ..if i have a number of accounts i repeat that for each bank account?
The invasion of privacy that this form seeks makes Google look like angels !
thank you for your kind assistance
Mike
ISA is just a vehicle, declare what you have into ISA, liquidity, stock or funds
Yes you need to list each company, and the value on the 31st Dec, por each company. Multiply number of shares by market price that date.
Accounts you type also one by one.
Thank you for your reply
Hello Javier
Yours is the best tax website by far and I have gleaned a lot from the Questions and Answers. However the one really simple question I have is whether I actually need to fill out the form 720 if I had not been in Spain 183 days by 31 December 2012. My husband is a teacher and we only arrived at the end of August 2012.
Thanks very much for your help; I look forward to hearing from you.
You lived more than 183 in other country, where you was resident during year 2012, so not resident in Spain.
In Spain tax residence is either for the hole year, or not resident any day. In Spain you cannot be resident part of the year for tax pourposes.
Good afternoon,
Yesterday I asked about declaring ISAs and I guess my question has got lost in the pile, so I hope you will forgive me for asking again: I have a stockbroking account and 2 sub accounts: 1 normal the other for my ISAs. Some of the holdings in each sub-account are duplicated eg. I hold Lloyds bank in each.
i) do I have to declare ISA holdings in Modelo 720 (they are tax free investments and therefore neither the owner of the shares nor the administrative entity (ie stockbroker) are required to submit any info. regarding them to the UK tax authorities)?
ii) If I am required to declare them in Modelo 720 do I declare the holdings separately – ie x shares in Lloyds in investment account and y shares in Lloyds in ISA account?
Many thanks,
ISA is tax exempt for UK residents, but not for Spanish residents. Bank should have informed you about this fact.
You are required to declare all of them, joint or individualy. In this case I fill 2 records because for me is easyer to check amount, if it is joint will not mach individual amounts with bank statement, its up to you.
Good morning, thank you for your reply. I invested in ISAs before I came to work in Spain so they are long term investments from years ago, like all my other non spanish savings. Does the tax agreement between Spain and UK not respect the different conditions of products if invested in PRIOR to changing residence? The brokerage/investment institution who administer my investment holdings does not provide an annual income statement on PEPS/ISAs, only for taxable products. I look forward to your reply and thank you.
If you check you ISA contract you will see that tax exemption is limited for UK residents, moreover as non resident you cannot put money into it.
As you cannot put money into them income is balance at the end of 2012 minus balance at the end of 2011.
Good afternoon and thank you for your reply. I am not clear on what you means when you say »
As you cannot put money into them income is balance at the end of 2012 minus balance at the end of 2011.
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Good afternoon and thank you for your reply. I am not clear on what you means when you say «As you cannot put money into them income is balance at the end of 2012 balance at end of 2011».
Since becoming resident in Spain you are correct I have not been able to invest in ISAs. Therefore I surely within the double tax agreement between Spain and UK there must be some recognition and respect for the terms of the other country’s investment vehicles invested in prior to change of residence – correct? I eagerly await your reply, and thank you in advance.
I am sorry but there is not such agreement.
When you opened ISA bank informed you that exemption only applies while you are UK resident.
Hi Javier,
This is my case:
I’ve just moved to Spain from Italy.
I ‘ve been hired by a Spanish company and I’ll start working for them on May 2nd, 2013.
I got my empadronamiento and my NIE one week ago (April 19th, 2013).
I own a house out of Spain and the value is more than 50000 euros.
Do I have to fill in and send the Modelo 720 this year (by the end of April 2013)?
Or do I have to send it only starting from next year (by the end of March 2014)?
Many thanks,
Stefano
Not because you was not resident 2012.
But next year you will need to fill because you will be resident during 2013 in Spain.
Hi,
I moved here in January, do you know if this for calendar year? (i.e. am I ok to wait until next year too?)
If you moved to Spain in 2013, during 2012 you was not resident in Sñain so you dont need to fill form 720
Javier,
I have been watching your informative blog with great interest. Forgive me if I ask something off the point of the 720. We just had lunch with a group of retired expat friends. Discussion of the 720 moved on to discussion of taxation in general. There appeared to be a huge difference as to what tax people were paying on their pensions. We all use different gestors, we all get UK private pensions and/or state pensions not taxed in the UK. Some of us are taxed separately, some jointly with husband/wife. Please could you settle the issue by telling me what the tax free allowances are on pension income for those aged 60-65 and over 65.
Javier,
If I dont have assets in access of 50K€ do I still need to file the 720?
you only fill if you assets exceeds 500.000
I am resident in spain and own a property (house) in sweden which was bought 1989 for less than € 50 000. The purchase price is less than the swedish latest issued «Valor Catastral» which is more than € 50 000.
Do I have to declare it?
Best regards
Kare Berg
Not, because acquisition value was under 50.000
FOR SWEDISH IMPORTANT NOTICE: AEAT has recently received data from Skatteverten since 2008, if you are resident in Spain declare with complementarias not declared income from Sweden. If you declare before receiving official notice, you will have not penalty
FIRST IF I AM PRESENTLY IN SPAIN FOR 185 DAYS DYE I HAVE TO FILL OUT THE 720 FORM
If you was during 2012, more than 183 days, and you cannot prove that you was resident in other country, that means that you was resident in Spain in 2012, so you need to fill form720
Hi,
I have obtained a Solicitud de Certificado for myself so that I can now submit the form 720 by internet. Can I also submit form 720 on behalf of my husband as he will not have the time to obtain the Solicitud before the Tuesday deadline, or, will he have to submit himself or through a Gestor
Thanks
Jacq
Im sorry, but not, for him, he will need his own certificate. You will need help of some gestor
I just found out about this regulation yesterday. I have two accounts in the USA which are both retirement accounts. One is an IRA–Individual Retirement Account– and one is a 403B/401K– tax-deferred retirement savings account. Both have more than $50,000. The money was accumulated over many years, though I haven´t added any money in at least 8 years. I have not yet reached the age to withdraw any money without penalties. I haven´t withdrawn anything. Do I have to file this declaration? Thank you! Gracias!
For this assets (IRA and 401K) in your case you do not need to fill form 720
Hi
If a person has one current account in the UK with more than 50,000€ and several others with an accumulated balance of less than 50,000 is it necessary to list all the accounts on the 720 or just the one which exceeds the limit?
Thanks
as all together exceed 50.000 you need to declare all of them, even the ones not reaching 50.000
Sorry I now have the answer to my previous question – all accounts have to be reported but do have another question:
Regarding point 8 above if the money from a bond or deposit which was cancelled during 2012 was put in a current account which is going to be reported, does the cancelled investment have to be reported too. It does say ‘reinvested’ but does a current account class as reinvestment?
Thanks
Any asset sold, cancelled, closed or Shell before the end of 2012 is NOT declared.
Thanks Javier that’s what I thought, question 8 of the AEAT FAQ makes this quite clear (reproduced below) but what I don’t understand is why you have the option to report a cancelled account or whatever when this is the first time to report – is it for next year? And why is everything you read saying you have to report cancellations?
I have read here in your forum that you have said pensions should not be included but I think most people are referring to a pension fund they have paid into in the past with an old employer or insurance company and is sitting in the UK until the day they retire and will buy an annuity. These should be included shouldn’t they? (“S”: Seguros de vida o invalidez y rentas temporales o
vitalicias, cuyas entidades aseguradoras se
encuentren situadas en el extranjero.)
Thanks once again Javier
Pregunta 8: ¿Se debe informar de la cancelación de las titularidades anteriores a 31 de
diciembre del ejercicio 2.012?.
Respuesta: No se existe obligación de informar sobre las titularidades que se cancelen
antes del 31 de diciembre de 2.012.
Ejemplo 1: Una persona/entidad residente era titular de una cuenta en el extranjero que
cancela el 1 de agosto de 2.012 con un saldo de 100.000 €, ¿tiene obligación de informar
sobre esta cuenta?.
Respuesta: No, no tiene obligación de informar puesto que a 31 de diciembre de 2012 no
existe obligación de informar sobre la misma.
I am toiling away trying to complete this nightmare form and am surprised and concerned that when completing the form for V and using the «tab» button to move to the next box, that the box entitled «fecha de incorporación» is highlighted. While no errors come up on validating the full entry of the particular «registro», I also understood that it is not a requirement to enter this info. Please confirm. Worried. Thank you Javier.
because is not mandatory to fill this cell for assets V and I
Hi Javier,
Can you confirm advice I have received from the Gestor who is filing my 720. Gestor says that the 50k threshold is PER COUNTRY, so if you have 50k in one country (UK) and 5k in another (USA) you only need to declare the 50k BUT NOT the other 5k. This sounds strange to me, is this correct? Also, I closed 3 accounts last year and transfered all the money to 2 new accounts which I have declared on the 720. I have read online that Hacienda want to know about the closed accounts also but Gestor said no and even called Hacienda to check who said no.
My Gestor has submitted a draft of 720 but Hacienda has not accepted some information relating to the IBAN and company number of 2 accounts with same bank. The bank is a non-clearing bank (Virgin Money) and only has a generic IBAN. I assume they need MY account info (which isn’t in the IBAN) but not sure how to actually provide this info as the form doesn’t have a box for this? Also the company number – is this the VAT number of a company? Is this the same as their tax ID number?
Sorry for all these questions – I don’t live in an expat area and my Gestor isn’t used to dealing with foreigners’ tax issues. She is doing her best but she has limited knowledge of UK tax/bank system etc. Thank you.
Accounts close before the end of the year are not declared.
Limit is 50.000 regardless you have assets in one or more countries.
Draft cannot be submitted,
Program does not verify if IBAN is right
Virgin money declare it as C5 as non IBAN account
VAT number is not mandatory
I did not think this form applied to me but have now been told by a friend that it might. I have 2 life insurance policies that I have kept going despite selling my house in the UK, 6 years ago, just in case.
One is death, terminal illness and critical illness and would pay out a decreasing amount in the event of death terminal or critical illness of my wife or I until 2027. If we die this year it would pay 27000 GBP for example.
The other is death, terminal illness and critical illness and would pay out 92597 GBP for death, terminal illness or critical illness if one of those occurred this year.
So total 119597 GBP well above the 50000 threshold.
I would like to know if I have to complete the form as I have to get a move on if so. I would feel robbed if I had a 10000 euro fine for not declaring something when I might never see the money in question.
Charles, if insurance has not surrender value, you dont need to declare.
Insurance covering risk, is not declared
But if it is a vehicle for your savings you need to declare. Even if at the same time covers a risk and is a vehicle for savings.
Hello Javier
If you exceed the limit in one category, say property, but have investments under the limit are you obliged to declare them, that’s to say everything in every category, as you have to make a declaration anyway? I have read a lot about the ‘3 categories’ but in the official documents I’ve only seen them refer to 5 (C,V,I,S,B)
And one last question what is the ‘clase de repsentacion de valores’ all about?
Many thanks
3 categorias
1.- c
2.- v i s
3.- b
If total amount in one categoria dont exceeds 50.000 no asset within that categoria is declared
I am American w/Spanish residencia. when reporting on bank accts in US, there is no IBAN and the banks I use do not Have a BIC code. If you say there is no IBAn it asks for BIC. Do I leave that blank? Do I put the bank routing number and my cuenta in the cuenta space or do I put the bank routing number in BIC space?
Its right that in US there is not IBAN, but BIC yes. Ask for your BIC SWIFT code,
Hi,
The form 720 is said to be «for information purposes only»
I am sure there will be tax to be paid as well, thats the purpose of course.
I am a Dutch national, resident in Spain. We own 3 commercial building in NL, that we rent out. all have a mortgage and other financing. 1 building has been vacant for 15 months.
The buildings are privately owned by us (not in a company). We pay tax in Netherlands on the proceeds. (a special (reduced) arrangement that is called Box 3, in Dutch Tax Law) So not matter the building is empty or not, the tax is to be paid on the value of the buildings in the property register. (IBI value in Spain)
Will Spanish Tax office also tax us on the proceeds? if yes a what %?
The Box 3 arrangement means that you cannot deduct costs of your investment, it does not matter if the building is rented or not. You always pay tax. The law says that all investments are taxed at a profit of 4% of their «IBI value. The tax rate is 30% of that 4% value. So you have to pay 1.2% of the value of the buildings, no matter cost, or profits.
How will Hacienda handle such an arrangement ! (tax is paid already in Netherlands)
Will Hacienda charge Tax in Spain on this ? They cannot double charge Tax?
I own the shares of company, but the company has little or no activity. A little bit of money on the account. Actually not worth to mention. But I as shareholder have a pension right from the company. The company has a reservation in the account to pay me this pension at a later date. The money is actually not there.
Do i need to mention this on the form 720?
rgds,
eduardo
What TAX? Income tax and Wealth tax already exist in Spain.
Spain as well as your country makes his residents to pay in a worldwide basis. So you need to declare your income in your country in Spain. And taxes paid in NL can be deducted from tax due in Spain.
In Spain, you pay 21% to 27% on your profit from the rentals, you can deduct amortization, interests, maintenance, communal expenses, and local taxes.
According to double taxation agreement between Spain and Netherlands, they can tax you here, what agreement states is that for avoiding double taxation; taxes paid in NL can be deducted from taxes due in Spain.
Taxation of your future income from your company depends on how you designed this pension. With this information I cannot tell you.
The model 720 contains a fantastic amount of detail about my assets- this could be invaluable to criminals- if I or anyone else is a victim of fraud – who will reimburse the stolen money/shares etc ???
Please hurry as I have to file it tomorrow ( or not if there is no guarantee of reimbursement.
1/2a
Yes. But its easier to stole that information from you rather tan from hacienda. And even having that information Banks have security.
Which category on the form 720 do premium bonds come under
V2. Valores representativos de la cesión de capitales a terceros.
Premium bonds are assets issued by a subsidiary of the Treasury for collecting funds.
Thanks very much for providing this information.
I was informed only on the 2nd of May (!) – and purely by chance – by friends about this new form 720. I was not aware of its existence previously. I am a Spanish resident with a Dutch passport.
I have a gestor who files my three-monthly IRPF forms, my IVA declarations and my yearly income tax; he has done so since 2008. He did not mention this form 720 at all to me. I would say its my gestor’s general obligation in taking care of my fiscal interest to inform me spontaneously. What’s your opinion on that? Thanks!
Go ahead.
There are 3 extra days for filling form 720 if you had tecnical problems.
Thanks for your quick response! Are those extra 3 days working days, i.e. the last day would then be Monday 6 May?
Think so
in my last comment,the point i am making is that ,in 2012 1 was what is termed a Fiscal Nomad and therefore,as i understand it excempt from tax that year in both the UK and Spain. please confirm and suggest what i should do now that i have inadvertantly summitted the form Many thanks.
if you filled form 720, its presumed that you are fiscal resident in Spain. If now you want to say the opposite you will need to prove it.
Read article 108.4 from Ley General Tributaria.
Hello Javier,
Thanks so much for the good advice listed on this site.
I like many others didn’t find out about the changes in the declaration laws until today!
I hope you can also help me with these enquires:
1. In 2012 I had Premium Bonds and an Endowment policy (an investment designed to pay off the mortgage on a property even though I sold the property long ago) which I believe would both be category ‘V’, the combined value was over 50k€, However the Endowment matured in 2012 and paid out cash into my bank account (aprox 18k£). Therefore the balance of my premium bonds was less that 50k€ and my bank account also less than 50k€ on Dec31st. Does that mean I don’t need to make a declaration?
2. In the future I will receive an inheritance from a relative of between 100k-150k€, I realise I will have to declare this amount in the year that I receive it. Can you tell me what my obligation will be to the Spanish tax man?
Thanks in advance, Matt.
Premium bonds, are category V2, and you will have not more than 30.000 GBP, so you dont reach the limit
Bank account also dont reach the limit for accounts.
That means that you dont need to fill.
About inheritance tax depends on many things: couuntry of your relative, type of assets, your region of residence in Spain…
Hi javier,
To change my status from resident to no resident,one of the spanish has asked me to
get «certificatado de no residente-modelo 790» from the police while the other bank
has asked just for certificate of residence from uk.If I get the modelo 790 then I have
to give back my NIE(the green paper),but I know that many people in spain who are
not fiscal resident have the NIE.Is it better to just close the bank account with this
bank?or I should give back my NIE?
thanks alot
For changing your status to non resident,
If you want to do it directly fill form 030.
If you prefer to do it indirectly, get a certificate of tax residency in other country, and stop filling any document as resident in Spain.
If it is just for the bank, you will need to sign the form bank will provide you in case of a non resident account, but for any other financial product you will need to show bank your certificate of tax residence issued by other country.
What is the «Valor Catastral» in the UK and where can I find it. I am doing the forms in Navarra so I still have a bit of time.
Also I have an offset mortgage account, and the bank account linked to it has more than 50.000 euros, but of course if there to offset the mortgage, do I need to declare it?.
Thanks.
Paula
In form 720, value to declare is acquisition value, for this form you don’t need valor catastral at all.
Offset mortgage account, must be declared in form 720. The offset mortgage account is linked to your mortgage loan.
But the big advantage of offset mortgage account is tax benefit. This design, linking to loan, Works in every country. The reason is that instead of obtaining interest, you pay less interest on the loan.
Good afternoon,
I only heard about the new law today(may21st) and am panicking a bit! We live in Tenerife and don’t work. I am retired, we live on my pension. We have a property in UK but do not recieve an income from it. The only money we have banked is to pay off the mortgage in a few years. We did not sell the house because it had lost so much value in the crisis. We were hoping things might improve!
What should we do? We can’t afford to pay any tax, let alone fines plus we’ve missed the deadline anyway.
Sue. Are you tax resident in Spain?
If not you dont need to feel this form.
Do you know what is the situation with the declaration 720 in Gizpukoa? I have read that they have not yet passed into law and so have not yet filled out the declaration becuase of this.
Declaration is mandatory. But, form and dates for declaring are not yet aproved.
After living in Portugal for five years, we moved to Spain in November 2012 and are now Spanish residents. We assume that we will become fiscally resident in Spain in July 2013 under the 183 day rule and therefore submit tax returns plus form 720 in 2014 for the year ended 31st December 2013. We still own a house in Portugal which was our main residence and which we are trying to sell but if it is not sold in 2013 it will have to be declared in the 720 form along with other money which is still in Portugal. We bought the house for 105,000 euros and hope to sell it for about 150,000 euros after the deduction of agent’s commission etc. We also spent about 40,000 euros on the house but until it sells do not know if the Portuguese tax authorities will agree for this amount to be taken into account when capital gains tax is assessed. If they do not agree to 40,000 euros of expenditure, we will be liable for capital gains tax in Portugal on the 45,000 euros profit which of course we will pay. Our question is will we also be liable for any capital gains tax in Spain on the 45,000 euros profit when it is shown in any future form 720 declaration after any future sale?
Hoping you can help in this matter and if you need any other information please let us know.
In Spain, as resident, you can deduct from capital gains, investment done in the property, as long as you have invoices… that will prove such investment. And acquisition Price will be inflation adjusted for determining capital gain.
Stocks and Shares Isa held in Fidelity Funds Network Account would surely go in Section ‘I’. If held in non income bearing stock and not being sold surely the difference between the year end valuations would not be taxable only any gain made when stock sold?
Stocks and shares Isa held in same Fidelity Funds Network paying dividends are obviously declared in Spain.
I have declared all dividends on these since becoming tax resident
Capital gains on your invesment funds, will be declared in Spain when you sell them.
Thanks for your reply – I am now somewhat confused – I did in fact reply to this sometime ago – but on coming back in – to check for a reply – I cannot see my comment on here – think I may have checked or unchecked the buttons incorrectly. Anyway I am also confused as your reply to me seems to contradict what you said to JMB about ISA declaration at the end of April. My position is that my husband and I have been tax resident since we came here permanently in January 2007. we both had Maxi Stocks and Share ISAs which we knew would not be tax free in Spain and that we could not invest in any more ISAs whilst tax resident in Spain – the funds within each of our Maxi Isas were both income producing and non income producing so we always declared the Dividend Income on our annual Renta Declaration – done by an assessoria and as you now confirm expected the others would attract Capital Gains Tax when sold and surely not be taxed until that time. Although it is not possible to add to our Isas whilst non UK resident it is allowed to switch the investments within an ISA account.
This we have done My husband now has all his in non income producing and has therefore not had any dividend income since his declaration for 2008. His Account is with Fidelity Fund Network. I have a Fidelity Fund also and just one of the holdings is producing Dividend Income and the rest are not.
I also have Maxi Isas in a Cofunds Account which had Dividend Income (all declared) but this has also been switched to all non Income and again no dividend income since 2008. We also hold Sterling OffShore Savings accounts with Lloyds TSB Gibraltar and Lloyds TSB Isle of Man (opened since we arrived in Spain with Halifax International which has now become LLoyds TSB) we have always declared all the interest earned on these accounts. we have a UK current account which used to earn a very small amount of interest – again we always declared that interest – but the bank stopped paying interest on current accounts a few years ago!. Because of the foregoing our Gestor says it is not necessary to submit 720 because we can prove we have declared everything. However since our Offshore accounts (Although mostly joint) are over €50000. my Maxi Isas are over €50000 as are my husband’s maybe we should. My big worry is this question of the need to have declared the difference in the value of the Isas between one year and the next as income – but your reply seems to say Not necessary?
A lot of people in our area have only just heard about the 720 declaration and sorting this out is a nightmare – I only found out when I went to my tax man to make the declarations for renta in the middle of May!!
There is a thin line, that will mean to be taxed or not.
If you sell investment funds, money appears in your account and with that money you buy another fund: you will be taxed.
But if somehow you ask your financial institution to switch from one fund to another without being a money movement in your bank account, capital gain is not taxed until the final sell of funds, with money appearing in your bank account.
This rule does not apply for funds in tax paradises.
But interest in bank accounts in tax paradises has not this problem.
The difference in value of your ISA year to year must be declared only if they are invested in funds in tax paradises.
If you have other questions you can also call me to my mobile.
Hola Javier
Well I didn’t manage to get our deckarations done to-day as Gestor was called away urgently so will be doing it next week. Further to phone call forgot to ask you exactly what other information will be needed under the «I» for my ISA Investment Funds besides ISIN numbers name of Fund and value at 31st December. Do we have to give acquisition date? . Surely we do not have to give acquisition prices since the idea is to establish value of assets at 31 December and thereafter only if an increase of €20,000. or more is made in any following year.
Once again your help would be much appreciated.
Acquisition Price for funds and shares is not needed.
I have just been reading your comments regarding ISAs to JMB at the end of April – and am awaiting a response from you to my query on 29th May.
I knew from the start that my Isa income would be taxable in Spain and with regard to Maxi Isas declared the Dividends on my annual tax declaration as did my husband – but not all the holdings in the Isa produce income most of them are capital growth. Since although we cannot add to Isas whilst non residents the assets held within them can still be switched and All my husband’s are now capital growth only. and I have only one holding which pays dividends. Our Gestor says that since we have always declared all of our savings income when it was paid – (this incidentally includes offshore accounts with Lloyds TSB International Gibraltar and Isle of Man we can prove the disclosure so we do not have to fill in 720 . However since you say that we should have declared the annual difference of value of the Isa as taxable saving we will not have paid the correct tax – so should presumably get on and ask him to make the declaration – both mine and my husbands exceeeds €50000.
I do not agree with yogur gestor, you should fill form 720.
ISA is a UK tax vehicle, in Spain you do not declare ISA itshelf you declare its assets.
For investment funda in fiscal paradises there is a special regulation. Latent gains are declares yearly and when finally you sell taxes paid previous years are deducted
Hi Javier
Many thanks for your reply to my rambling messages!! I think I may have confused you slightly by trying to explain everything. I assume by fiscal paradise you mean what I would call tax havens ie my offshore accounts? In fact these are all straight forward savings accounts and I am sure they will go in the bank account section – we only started using offshore when we came to Spain and have always declared the interest on them every year. Our ISAs are all held with UK FundsNetwork and Cofunds in the UK and are all Investment Funds so can I assume that I do in fact treat them as section «I» assets as you stated in an earlier reply to me. Obviously since we have not been able to invest in ISAs since we left UK they are held in UK and not in offshore tax haven. I will certainly get my gestor to complete forms 720 for us – are we going to get fined for late disclosure? If so – presumably we will have nothing left?!!!!
\thanks for your ongoing advice
In Spain is considered fiscal Paradise, any offshore country that has not signed at least 12 agreements with other counties with clause for exchanging tax information.
For filling late you will have a fine of 1.500 euros.
As long as vehicle is an Investment fund, code will be «I».
Changes of value in Investment funds are not taxed until you sell them.
But dividends are taxed in the tax year you received them. In Spain, dividends from stocks or shares are tax exempt until 1.500 euro. This exemption does not apply to dividends from investment funds.
Hi Javier, I asked this before but I guess you were too busy with the 720 deadline.
If this isn’t the right blog can you point me to one please?
Our group of friends has wildly different ideas on tax allowances for pensioners but can’t produce proof.
We get (approx) 5k personal allowance
2.4- 4k earned income allowance (the larger the pension the lower the allowance)
3.4k joint declaration allowance
First 1.5 k of divident income tax free
This is what our gestor has claimed for us on our tax return.
I know there are all sorts of other things (like tax relief on buying your house – now stopped) But in general terms are there any other allowances on Pension income.?
You stated most common allowances.
Handicaped will have up to 7000
Capital gain for over 65 is exempt for permanent residence
Pension plans reduce your taxable pension income
…
When you say ‘pension plans reduce your taxable income’ do you mean annuities? Our income is from state pensions and I have an occupational pension but it isn’t an annuity – my understanding is that it is treated as ‘earned income’.
All this income in Spain is treated as «wages income». And contributions to pension plans (you can contribute even if you are already retired) deduct from wages income.
Hello Javier,
I have a brokerage account in a bank in Canada that currently holds one stock and some cash. There is only one account number that references everything. My gestor has declared it on my 720 as a type ‘C’ subtype ‘5’ other account. The total value of the stock and cash combined was declared. This stock has given dividends and I have declared them on my 2012 renta. Is there a potential problem if the hacienda does a cross check with my 720 and does not find a stock declared using ‘I’ code?
thank you,
Shane
I prefer C5 for liquidity and V1 for stock.
But dont see potential problem with it
Hello Javier, I’ve been living and working in Spain since 2008. I have a flat in UK that I’ve never declared as it wasn’t let out. I know would like to sell it and transfer the money to Spain in order to buy a flat. What can I do to rectify this situation? Do I need to pay a fine? Thank you
It is simple. Present complementarias for the last four years, paying the tax difference.
There will be not fine, just interest for paying late at 5%.
Hi Javier,
Am I correct in assuming that if overseas assets amount to less than 50.000 euros there is no requirment to complete/file a 720?
Best wishes
Bob.
Yes, You right.
Hola Javier,
When declaring a house, you write «the value of acquisition.»
Does this refer to the actual price intially paid when buying the house, or the value
of the house on the market today: For instance, a house bought many years ago for
€ 35000.– would now have a value of ca €150000,–
In your case you should declare for 35.000 euros.
Hello Javier, some friends rcommended your site, and I have some questions.
We have been residents in Spain for some years, due to an error, we never gave up our residency in Norway, and we will not do so. We spend approx half year in Spain and half in Norway, and we wish to continue as residents of Norway due to medical needs there.
We asked a gestor about the Modelo 720, and he said we do not have to declare this Modelo because we do not wish to be resident. What do we do with our residencia now, do we have to do a «baja», – and how is that done, and what will happen to our accounts etc?
The gestor says we have to present a Modelo 220 for our properties in Spain, but as far as I know, very few expaths do declare this model. We have had our house since 2001, and also two apartments since late 2009, what happens if we don’t declare Modelo 220? Is there a fine?
We do not work in Spain, but I have a registered company in Norway, and we declare for the company and for our three Spanish properties in Norway. For this I have got a statement from the Norwegian tax office.
Thank you,
Kakspa
If you don’t want to be considered resident in Spain, you should be able to prove that you are tax resident in Norway.
For precaution reasons I should advise to ask for this certificate in Norway, in reference to Double Taxation Agreement between Norway and Spain.
With this certificate you will be able to prove your non tax-residence in Spain.
As non-resident
1.- You don’t need to fill form 720.
2.- But you need to fill form 210, one for each real estate in Spain. For the ones non rented is filled once per year. For the rented ones is filled during the 20 days after the end of every term.
Until now, was easy to play this game, not declaring in Spain, and no one will question whether you don’t do it because you are not resident or because are resident but you don’t reach the limit for filling.
But now AEAT and Skatteetaten are exchanging tax information. So now, you should declare in the proper way.
Thank you!
We already have the certificate to prove our non tax-resisdence in Spain.
1) Do we need to go somewhere to say we are not resident (we applied for residency years ago, but we were not aware that we only could be resident in one country at the time), or is the certificate to prove our non tax-residence enough?
2) You still mean we have to declare in both countries, both in Spain (210) and in Norway as we already do?
3) If the answer is yes, we only declare the last year and the years to come, we do not declare many years back, is that right?
Our properties are not rented, they are for family and friends purpose.
4) Is it easy to fill the forms, or do we need to have a gestor to fill them every year?
The time for filling form 030 for changing residence status is one month after status changed.
Now is better not to do anything.
As long as you already have tax residence certificate from Norway, you do not need to warry.
As resident in Norway you need to declare in Norway your wolrdwide income.
As well as in every country that you have income, you should declare in that country, but only income originated in that country.
This situation, is what may produce double taxation. And that is the reason why Agreements for avoiding double taxation are signed.
Taxes in Spain expires after 4 year since deadline for filling. So you Tax Authority can claim years 2008, 2009, 2010 and 2011. Deadline for 2012 is Dec 31st 2013. And that day will expire 2012.
You can fill yourself, is not difficult. Or you can ask any tax advisor or gestor. Or you can ask us, we bill 50€ for each form 210.
Thanks again for your very good answers.
If we finally decide to declare the 210 forms for 2012, what is the worse case scenario if we do not declare the four years before 2012? Will we be fined, or do they just ask us to declare back four years if they find out?
And, if we don’t declare at all, and they find out, what can happen? A fine?
I wish to know all about it before filling the documents!
If you want to know amount to pay every year:
1.- find within your bank documents «Recibo IBI», in that bill will show «Valor Catastral».
2.- Multiply «Valor Catastral» by 0,27225%; that will be tax to pay.
This amounts paid in Spain can be deducted from income tax to pay in Norway.
Worst scenario will be: Spain considering you as resident, so you will be forced to pay taxes for your worldwide income in Spain. For now you are «protected», but as occurs in Norway, Tax Authorities may verify requirements to check your real residence.
Worst Scenario as nonresident in Spain: will be taxes for not expired years. Cost of this risk you can estimate by adding taxes for every year, there will be also interests for paying late (at 5%). Penalty will be 50% of taxes not paid. Penalty will not apply if you pay this taxes before you are required.
If you do not pay those are latent risks until a tax of each year expires.
First I want to thank you for a very informative site. Sencondly I would like to ask for your advice. I have worked and lived in Spain durimg the period 2006-2011 as tax non resident (expat contract/ special tax regime) and also in 2012 jan-july as tax resident. In august 2012 I moved to Japan. I will now probably return to Spain in jan 2014. I was initially worngly informed by my tax gestor that I would continue as a tax non resident also in 2012. He then informed me the I would be considered as a tax resident in 2012. I realise now that I should have filed a model 720 but as I am to late I would like to ask for advice on the best way to proceed.
Thank you in advance
Dwight
After the arrival year, and the 5 following year, you become fully tax resident in Spain. That happened in 2012.
So, for 2012, you need to check if you are resident or not. In Spain you cannot be resident part of the year: either you are considered resident the full year, either you are not resident the whole year, even if you lived part of the year in Spain.
From your information you lived in Spain more than half of the year, so seems that you are resident the hole 2012, unless you prove the opposite.
To prove your non residence in 2012, you will need to prove your tax residence in other country. In your case: in Japan.
So if you get a certificate of tax residence in Japan for 2012, you will not be considered resident in Spain, under what is stated in article 4 of the double taxation agreement between Japan and Spain.
Otherwise you should fill form 720, and Renta for 2012.
How to get tax residence certificate in Japan:There are no ready-made forms. In order apply for a certificate of residence; you should submit to the tax authorities documents:
– a copy of the registration card
– a copy of the Japanese tax return
Regarding private pension income that is already taxed in the UK. If this income is more than €20,000 per year and is not being spent therefore making my capital grow by more than €20,000 , would i have to still do a Modelo 720?
As you talk about 20.000 euros, I asume that you already declared 720 with that pension.
Income will go to a bank account, that you do not need to declare again, if increase in balance do not exceed what was declared.
Thankyou for the response. Yes, the Modelo 720 was done as assets are over €50,000.
So, if the pension income is not used and this makes the bank balance grow by more than €20,000 per year i have to do a Modelo 720 every year even though the origin of income is from a pension?
In that case, you will need to fill form 720 every year.
But only for the accounts, as is the part where you have an increase over 20.000
Declaration for insurance, stocks… does not to be declared as this part decreses.
Thanks for all the advice. You have given a link for the official exchange rates of many currencies. The Colombian peso is not included on the list. Is there somewhere I can find the official rate?
As there is not oficial Exchange rate you can take market rate on 31st dicember of the year to declare.
Hello Javier,
I became resident in Spain in 2011 but receive my Government pension in UK where it is taxed. I also receive rental income from my house in the UK which is also taxed .
I earn and keep no money I Spain but own a house there.
I declared my house on the Form 720 in the UK which I bought 30 years ago. I am now thinking of selling it. My assessor tells me I do not have to submit a tax form to the Hacienda and the Hacienda have also told me this every year since I took Residency.
If I decide to sell my UK house next year would it be liable to Spanish Capital Gains Tax if I am still a resident of Spain
If you are tax resident in a country, you pay taxes in that country for your worldwide income and capital gain.
And in the country where you are NON tax resident, you pay taxes only for income and gains obtained in that country.
I think gain in your house in UK, could be exempt in UK. But in Spain will be taxed.
Good news is that gain in your house:
1.- acquisition value will be inflation corrected by approx 30%
2.- gain will be taxed approx at 6% o 7% tax rate. Because you bought your house before 1986
Thanks Javier,
Apparently I am ‘fiscally registered’ in Spain but I have conflicting advice on whether I need to submit a tax form! The Hacienda and my assessor say «No».
What portion of the profit would be taxed bearing in mind I have only been resident for 3 years?
The UK Tax Office say I will not be subject to Capital Gains Tax in the UK.
Would I be better leaving Spain at the end of this year(and renouncing my Spanish residency) and remaining out of Spain for more than 183 days next year when I sell it or do I tell the Hacienda I am non-resident and pay the back-dated non-resident tax on my house in Spain which is about 200 euros a year.
To live more tan 183 days in a country is one of the reasons that will make you tax resident in that conuntry. But not the only one.
You should analize propperly, your tax residence issue and check your choices for changing it.
Tax rate in the house´s profit, is what I told you in the first answer.
Hi Javier,
This is a very helpful source of information. Many thanks.
A question please.
I understand as a Spanish resident I do not declare UK Pensions on my 720 (I am not drawing from these). Do I declare these Pensions on my Wealth Tax (Borrador) declaration?
Yes, pensions payd by the UK Estate, are not declared. Neither on wealth tax.
This not apply for private pensions
Hi JAvier,
Thank you for being the first to highlight the difference between UK State and private pensions. I have a pension plan through my UK employer who is not the State. So this needs declaring.
Assuming the 720, Euro 50,000 threshold, has been reached. Are the only items on the Wealth Tax declaration but not on the 720 declaration, assets held in Spain?
Many thanks
Andy
As long as you are contributing, there is not need to declare.
Only when you become beneficiary of pensión plan (collecting money from it) you will need to declare it in form 720. And income: in individual income tax form.
Assets held in Spain are not declared in form 720
Good morning Javier,
A question please. I am resident in Spain and have a private loan of Euro 200.000 to a non listed UK company. The company pays me a fixed interest rate and there is a fixed date for the capital repayment back to me.
Should this «asset» of Euro 200.000 be declared on the 720 or Wealth tax? What category may it fall under?
Many thanks in advance
Andy
In form 720 only loans, instrumented as tradable assets (bonds…), must be declared.
Private loans are never declared.
However, in Wealth tax it should be declared.
Additionally, if you are linked to the company, as administrator, stakeholder, or relative of any of those, the operation should be proved that was valued at market interest rate.
Also if you are partner of that company, subcapitalization anti-abuse rule applies. This will mean that part of those interests can be taxed, not at the savings rate, but at general rate.
Como no tengo mas de 700,000 euros en activos puedo considerar que esta declaración no tiene implicación fiscal?
Brenda, al no tener más de 700.000 euros en activos entre España y el extranjero, no tienes obligación de presentar declaración de patrimonio.
Pero si tus activos generan rentas (dividendos, intereses, ganancias), estas debes declararlas en la declaración de renta.
I had an investment bond with a UK life company for 20 years. The last 12 years however i have been living in Spain and declared it on the Modelo 720 this year. However i have now surrendered the bond and the Life company tell me i have a 100,000 euro Gain over the 20 year period. What are my tax liabilties in Spain? Thanks
Tax for that, will no be over 6.750 euros.
Thanks for the reply, I had thought the figure would be higher, is your assessment of it not being higher tan 6750 euros because i had the bond for 20 years? I just thought the Hacienda would apply 27% capital gains tax on the 100,000 euros gain?
Yes. Your insance is prior to new regulation from 20th January 2006, so you still benefit from old regulation that allows you to have exempt 75% of insurance profit and only pay taxes for the rest 100.000 x (1 – 75%) x 27% = 6.750. And sayd, not more, because if that insurance contract was signed before 31st Dic 1994, you will have extra reductions.
Hello,
If the holding value on an account is zero during all the whole reporting year, is it still required to report it in the 720 form?
Is the a minimum value under which accounts do not need to be reported?
Thanks in advance
Dwight
If you never reported, joint balance of all accounts should be over 50.000 euros, under that limit you do not need to report any.
If you already reported you will need to report again if by the end of any year, joint total balance increased by more than 20.000 over amount declared previously.
How can I check my model 720 is filed with the Hacienda/government?
Going to your Tax Office or with a digital certificate in internet http://www.aeat.es checking your presented forms.
We are expat pensioners , we live here in Spain but as all our money is in England and the interest is taxed at sores that is where all our tax is paid. I know this makes us non tax resident , but do we fill in the 720 or pay the wealth tax on our property here.
We have three joint accounts with more than 50.000 euros plus a flat in England. which we know we will have to declare. We also have our own separate accounts with less than 50.000euros in them
, do these have to be declared as well. We keep getting different information which is very confusing for us
We have been told we will have to pay the wealth tax for the last four years and could get a hefty fine our Valor Catastral went up three years ago from 59.000euros to 215.000. this could end up being a very large amount to pay. We got our residencier five years ago and was told by the tax office in England we did not need to file a Spanish Tax Return as we do not have enough money in the bank here to earn any interest, we make nothing.
If we become non resident does that mean we will not be allowed in the country for more than 183 days.
If you are non resident in Spain you do not need to fill form 720.
Civil residence is not the same as tax residence. As citizens of any EU country you can live any time you want in Spain.
For tax residence seems to be a conflict of residence, you are tax resident in England for main economic centre, and in Spain for number of days. When conflict of residence, DTA UK-Spain states tiebreakers rules for residence: main economic centre has priority. So you are tax resident in UK, even if you live hole year in Spain.
If so, and for making stronger your tax residence in UK, apply for a tax residence certificate according to DTA between UK-Spain to HMRC.
HMRC office in England, cannot inform about Spanish tax liabilities.
About form 720. If total balance of all account ads up more than 50.000, you should declare all, even the ones with less than 50.000
Dear Javier
Does this mean that I can own a house in Spain and live there all year but keep nearly all my money in England (but not own any house in England) and still be treated as UK tax resident? What decides where my main economic centre is? Or does owning a house in Spain and none in England mean that my main economic centre will be Spain?
Location of your main economical and personal centre, will be where You have more personal and economical links.
Personal: family, friends, colleagues, partners,
Economical: wealth, Income, future or present pension…
This tiebreaker rule applies before the one about number of days. So, is possible that living hole year in Spain you keep being tax resident in UK. And for making stronger this position apply for a tax residence certificate to HMRC, this will work well with Spanish tax authorities. But don’t forget collect every document that may prove that UK is your vital center.
Javier,
This really surprised me. We own a house in Spain, our pensions are paid in England. Our income and small capital is in England and Gibraltar with enough transferred to our Spanish bank account for living expenses. We have family in the UK but not close. We are Spanish Fiscal residents, I thought we had to be, is that OK? Both Spain and the UK seem to have accepted it. We were advised it was preferable for Inheritance Tax purposes to establish fiscal residence here. (we live in Andalucia)
Margaret, you can not be tax resident of both countries at the same time. But this trick has worked well, as long as there was not an effective exchange of tax information, but soon will not work.
When you speak about inheritance tax, do you think about you an your husband? Or about other relative?
In the first case, if you have common assets regime, this tax can be fully avoided.
If you want you can call me to my mobile 670720457
Hello,
I have a Trust fund in Luxemburg, and the money is stated as a loan and on death the loan is NON repayable, my spouse will inherit my half, would the spanish tax authorities take that trust into consideration and make a tax claim on that half of the trust and expect her to pay the tax from other sources.
Assets are already on her name. On your death she will inherit the loan. Which is quite difficult to trace.
Depending on which Comunidad autonoma she is resident, tax could be 0% up to 34%.
Javier,
Sorry if I was unclear. What I meant was that both Spain and the UK recognise us as Tax resident in Spain. Our pensions have a no tax classification in the UK and we pay Spanish income tax.
In that case, you should apply for a Spanish tax residence certificate from AEAT.
In general pensions are taxed at residence country, unless you have a pension as public servant and citizenship of the country that pays pension, because in that case rule of tax residence switches to tax due at country which pays the pension.
Hi Javier
You have said to Margaret
«When you speak about inheritance tax, do you think about you an your husband? Or about other relative?
In the first case, if you have common assets regime, this tax can be fully avoided.»
Is this common assets regime for Spanish or UK fiscal residents? If it is for Spanish tax residents does this mean there is a way if I die for my wife to avoid Spanish inheritance tax on our house in Spain which is just in my name?
Thanks
Under common assets regimen, any asset bought on your name, if you can not prove that money used to pay it was exclusively yours, is presumed to be joint.
For joint assets, for inheritance purposes, 50% is already of your spouse, and only your 50% will pay inheritance tax.
Inheritance tax is a progressive tax, has a personal allowance tax exempt, and there is another allowance of nearly 200.000€ for your permanent residence, plus 50% from common assets division, in many cases will mean not paying inheritance taxes at all.
Would Inheritance tax for spanish resident beneficiaries also include money in a life insurance bond? If the beneficiaries are in the Valencia región would a spanish regulated life insurance bond be more advantageous for inheritance tax purposes than just leaving a large amount of money in a bank?
In Valencia, as well as in Spanish law, there is a 9.200 euros allowance for every beneficiary from live insurance.
So, it is a good idea to have 9.200 euros in live insurance, or tree times if you have 3 beneficiaries in Spain.
Hello Javier
Could you clarify if is necessary to report assets for 2013, if they are still within the €20,000 + or – reporting regulations i.e what you submitted in 2012 , but you have opened new saving accounts because the previous insurance / investment accounts matured.
Good question. But I have not yet an answer. In September I sent a formal question to Tax Authories. I am expecting answer, but they have 6 months for answering. Not latter than in Febrary I will have it.
Give me a call in 1 month.
I think, if it were a bank account defenetily you will need to represent form 720, because of cancellation of old one, as one of main data, IBAN, changed.
But for insurance policy, you only need to declare insurance company and amount; in this case I think there is not need for re-filling.
Hello Javier,
My question is similiar to the above,
Can you please tell me if I closed previously declared bank accounts and moved those assets into other declared bank accounts and a new bank account, with no increase over 20K in this category, do I need to do the declaration again this year?
Effectively I have moved around assets in the bank account category. But I did close 3 accounts and opened 2 new ones.
Also do I have to declare all accounts in this catagory again or only the closed and new accounts?
regards,
Shane Kelly
Yes. You need to declare only the cancelled accounts.
Hello Javier, what a very useful site!
You don’t seem to comment much on valuing securities; if I hold equities at the year end, how do I calculate the average value? Can I take the value at 1-Oct and the value at 31-Dec and work from there?
Surely I do not need to work with the daily prices for the assets – that would be a lot of work!
Many thanks,
Trey
You declare value at December 31st.
If you need to convert to euro, you use official tax rates from European Central Bank, you can check them here http://www.boe.es/boe/dias/2014/01/03/pdfs/BOE-A-2014-112.pdf
So only average value for bank accounts then. Much easier to do!
Many thanks for the answer, have a great 2014.
Trey
For average balance of bank accounts use folloging formula
(30 Sept + 31 Oct + 30 Nov + 31 Dic)/4
same to you.
Hola Javier:
Quería hacerle una consulta que hasta ahora ni siquiera nuestra asesora ha podido respondernos. Mi marido es ciudadano británico, residente en España y ha cotizado como autónomo durante 15 años. En su país trabajó como profesor para la autoridad local en Fife (Escocia), y al cumplir los 60 años comenzó a recibir una pensión de la Teachers Public Agency. Más tarde, al cumplir los 65, comenzó a recibir otra pensión compartida que se gestionó desde el INSS : por parte de su país la pensión correspondiente a los años que trabajó allí (una pensión estatal, no privada) y por parte de la SS española según los que trabajó aquí. En la actualidad somos cotitulares de un préstamo hipotecario, por lo que, según nuestra asesora, nos conviene hacer la declaración de la renta conjuntamente, pero sólo hemos declarado la parte de la pensión que recibe en España. Mi pregunta es: al haber trabajado para el estado , ¿están exentas las dos pensiones de su país de ser declaradas?
Muchas gracias
The part of your husband pension as UK public servant, is exempt of taxes in Spain, and only UK can collect taxes for this part of the pensión.
So, in Spanish income tax, this part should not be declared. In Spain you should declare only, the Spanish part of the pension.
And, of course, if you have not income, it will be better to fill IRPF jointly, for getting jointly allowance and full allowance for payment on your permanent residence.
Hi Javier,
I have moved to Spain from England ,25 December 2012! And I wasn’t aware
That I had to fill 720 form, I own a house in England worth €300.000 ,will I have to pay panalty (€10.000),I haven’t fill the form 720…thank you
What means ‘I have moved’?
Consular registration in Spain?
Official communication to Spanish Tax that you become SPANISH tax resident?
I went to ayuntamiento and got myself certificado de
Empadroamento….registration date was 17th December 2012
,so for the year 2012 I haven’t fill the form 720 my question
Is do I have to pay penalty ? Everything is too complicated
Here,as I am still paying my all my taxes in England ,I am even thinking of de registering and be non resident in Spain again..
Ask a Tax Residence Certificate to HMRC.
Empadronamiento is a civil procedure not a tax one.
Hello Javier,
I will be moving to Spain this summer and am the beneficiary of a trust that owns 3 operating companies in Canada. When in Spain, I will set up a Holding Company in either Spain or Denmark that will in-turn own a consulting company in Ireland. This company will bill consulting fees to the 3 companies in Canada and also later this year, other clients in Africa and Ireland. I assume that the Irish company can accumulate corporate profits without having to pay any Spanish corporate taxes as long as no dividends are being received. I am also assuming that if this corporate structure is owned by me directly, I would have to declare the balance sheet value (i.e. the after tax cash value remaining) on the form 720? Also, if any dividends were paid out to me, would the tax rate be in the 21 – 27% range and if the company is in Ireland and would I need to pay social security payments on this income in Spain if I received no salary?
Thanks!
Trust do not exists in Spanish law. Most similar vehicle is «fiducia». Trust is taxed as any vehicle that not pays corporate tax.
If trust bills Canadian companies, this income will be taxed in beneficiary tax income.
Any company within the trust can accumulate without you or the trusts paying taxes.
In form 720 you declare trust value by the end of year.
Dividends paid to you o the trust will be taxed at 21-27%, government is reviewing income tax, may be soon will be cheaper (2015 there are elections).
When you are in charge of a Spanish resident company, you need to pay social security.
You can also pay, because you want. This will give you right to medical care. It is not expensive, less than 3.000 per year, and with this payment your wife also be granted with medical care.
My wife and I officially became fiscally resident with the Agencia Tributaria on 18 February 2014.
Can you clarify when we need to submit our first Modelo 720; do we need to do an initial submission now, or at the beginning of 2015 before doing our first IRPF return?
Thanks
Almost. Tax residence in Spain is either the hole year, either not any day. So, your tax residence started on the 1st January 2014.
So you need to fill form for tax year 2014. This must be done within first term 2015.
Until next year you do not need to fill any form, but the one for saying that you started as tax resident, and the one for activating your NIE issued by police in the tax database. Both are done with form 030.
Hi Javier,
Can you advise if I am a resident of Spain (with a non-lucrative resident visa – meaning I am not allowed to work here, but can live here with a registered NIE), am I required to file a 720? I have no assets here and transfer money from Australia monthly to pay my living expenses. I am registered as an Australian resident for tax purposes.
Thank you,
Toni
As tax resident in Australia, you are non tax resident in Spain.
But as you are living most of the year in Spain, for avoiding Spain to presume that you are tax resident in Spain, will be useful to collect your prove of residence in Australia: certificate of tax residence in Australia.
Only tax residents in Spain are required to fill form 720
My wife and I are residents of Spain of British Nationality. We have a current joint account with a UK bank. Our joint UK pension is paid in that account. That account stood at 31 December at less than 70,000 GBP. We declare our income to Agencia tributaria in Spain each yearand pay tax.
As joint account holders is 70,000 GBP divided by 2 which is less than 50,000 Pounds. We have no other assets in the UK or elsewhere.
Please help
50.000 limit, for form 720 is calculated adding total value of assets.
But is NOT calculated adding your part in each asset.
Both needs to present form 720.
Do not worry for filling late, may be a fine of 1.500 could be issued. But for all the ones I filled late, until now nobody has yet received a fine, and same of them were fill 10 months ago.
we are tax resident in England we do not earn anything in Spain, we are both pensioners we do own our own property here. do we need to fill in the 720 form. we have all the proof we need to show we do pay our tax in England,the only thing we pay here is the ibi
on the property, we do have our nie as we live here most of the time
As not residents you need to pay IBI and form 210, for your real estate in Spain, once per year, amount will be 0,27% of cadaster value.
Complete, your proof of not residence asking HMRC to issue a certificate of tax residence in UK.
Hi,
Like you i found our selvees in the same position.
I think what the reply missed out for you is that if you spend more than 183 days a year out of the uk you are considered resident in your place of abode.
Example if you live in Spain most of the year you have to add up your days out of the UK, to prove you are a resident. So if in Spain for 184 days you are considered under the tax laws to be a tax resident of Spain and are due to pay tax in Spain .
We went onto Spanish tax last year both ocupational pensions none workers. uk pension now paid gross.
It was not that bad to do with the help of a proffesional tax adviser. Amount paid about the same, but peace of mind is worth a lot.
It was also usefull to get onto Spanish medical service, and if either of you became ill and needed a regular percription the amount you pay is dictated by your fiscal number, and your ability to pay.
Any one else has to pay full amount ?
Hi Javier,
We have been living in Spain since 2007 and have owned a property here since that year. Our only incomes are our UK state pensions, a Civil Service Pension and my wife’s small private company pension. All these pensions are taxed in UK. Although we both have Residencia, we are not tax residents.
My wife’s father (who lived in the UK) died and she inherited the proceeds of his UK estate in January 2013 which was in excess of £50,000. From the proceeds plus a small loan, we bought a property for £95,000 which is now rented.
We have been told that this UK property must be declared on form 720 but would like to know if we are liable to Spanish taxes on this inheritance as we do not have any taxable income in Spain.
If you are not tax residents in Spain, you do not need to fill form 720, neither to pay inheritance tax in Spain.
Most important is to collect the prove of your not residency in Spain: a certificate of tax residence issued by HMRC
Even though we pay our taxes in England we do live here most of the time and have our residencia, If we were non-residents we would have to leave the country for six months at a time, although England pays for our health care over here as residents.
So what are we according to the 720 (resident or non-resident).
We have all the proof we need to prove we pay our tax in England. Please help
Christine Duncan
In case of conflict, because of a double residence, what applies is the double taxation agreement between UK and Spain, instead of their national laws. Check article 4.
And get your tax residence certificate from HMRC. With this you will have no problem, living in Spain, and being tax resident in UK.
Thank you for your reply, could you please clarify what article 4 is and how do I get onto it. Does having double residence mean I have to pay the wealth tax on my property like a non-resident has to . Also if anything happened to one of us would the other partner have to pay inheritance tax.
Christine
Inheritance, yes, but when married, most of the times is peanuts.
Dear Javier,
A couple of questions regarding the 720 declaration of bank accounts. Firstly, is it necessary to declare all bank accounts if the cumulative amount is >E50K? Does this include empty accounts and credit card accounts, and if so how to report debts?
Also the address of the bank, is this the headquarters of the bank or the local branch that I am registered with?
Which sub-catogary do ISAs come under?
Finally some savings accounts do not have IBANS only account numbers, how can we report them?
Many thanks for your invaluable help
Includes empty accounts.
Credit card accounts are not declared as long as you cannot use them. I mean you do not declare them if they are just an instrumental vehicle for the bank regarding your credit card, and they ONLY reflect your use of the credit card.
Address is headquarters
IRA, most of the cases are C1.
Any account in Europe for sure has IBAN. Ofshore or out of Europe may be has not IBAN, set code O, and type your account number.
Can you explain what the Article 4 is and how do I get onto it to be able to read it.
As double residence do I have to pay the wealth tax on my property and also would we be liable for Spanish Inheritance Tax.
Thank you for your help so far
DTA, will tell you, where are you resident. Wealth tax is not the same as Inheritance Tax.
this is the article 4 (the one from UK-Spain DTA):
i have uk passport. i work in spain and pay taxes in spain. my elderly parents in uk have just gifted their house to my sister and myself in equal parts in october 2013. my parents have use of the house (uso fructo).the total value of the house is 250,000 euros.
do i have to declare on modelo 720 my 50% share of the house in the UK?
thank-you. elizabeth
Yes. You need to fill declaring total value 250.000, set ownership to nudo-propietario, and percentage to 50%.
Deadline is March 31st.
Thank you for this informative post.
I am curious about this paragraph:
The presentation in successive years, after presenting form 720 for the first time will be mandatory when the value declared increases by more than 20.000 €.
Last year I submitted the 720 form declaring a property in the UK that was worth 240,000 EUR. Today, the property is worth more or less the same (perhaps slightly less due to exchange rate movement).
Do I need to submit another 720 form this year or not? I have no other assets to declare besides the property which was already declared.
Many thanks!
No. In the future you will only need to declare if GBP appreciates, so acquisition value in euros increases more than 20.000
hi,
I declared on the 720, a house in the UK last year which myself and my brother inherited from our mother. We put the vaule of the property at 220,000 pounds. The house has now been sold for 190,000 pounds and the money split 50/50. This money is now held in UK banks. Do we need to fill out the 720 again? We have been heard we do and we need to declare how much we paid for the property and how much we sold it for If so what value do we put on how much we paid for the property?
Yes, declaring:
1.-real state sell, you only declare selling value
2.- bank account opening
Hi Javier,
Thanks very much for all the information on the site, it is very helpfull. I wonder if you could help with the following scenario involving shares (aciones):
31Dec12, Have 200 Shares of BP (previously declared in last years modelo 720)
01Feb13, SELL 50 Shares of BP
01Mar13, SELL 60 Shares of BP
Should I declare:
1) 90 shares using key ‘M’, 110 shares using key ‘C’ with combined sale amount
OR
2) 90 shares using key ‘M’ , 50 shares using key ‘C’, and another separate entry of 60 shares using key ‘C’
??
I’ll probably go with (2) as more detailed, but maybe I don’t need to and (1) is sufficient?
I have groupped share buys together (eg buy 20, buy 30, buy 20 = one entry of 70 ‘A’) as the price used on the 720 form is on the same day (31Dec13), and I dont need to specify the purchase date.
All very confusing to know how to do this correctly. Any suggestions greatly appreciated.
Thanks,
Monica.
For sure You need to declare sold stocks with code C.
New acquisitions only if yearly increase in value is over 20.000
Hi Javier,
Last year I declared the shares that I held in 6 different companies. I have sold the shares of 1 of those companies at a loss. Do I declare just the shares sold or do I have to declare everything again? The value overall has not increased by 20000 euros (in fact quite the opposite has occurred).
Thanks in advance,
You Only declare stocks sold
Hi Javier.
Great site with loads of information. However, I have two questions about the Modelo 720. I have closed two bank accounts this year. I know I have to report the cancellations, but I’m not a 100% clear ehther I have to report the new accounts. I don’t think I do, bvased on tour answers to other poster. The value hasn’t increased by €20k.
My other post concerns last years return. I reported all my accounts last year (about 17 ). However, on checking for this years return I discovered a savings account that I should have reported, and didn’t. The balance last year was about €800. This year it is zero. It seems to me I can either
a) Just ignore it and see what happens.
b) Report it this year.
c) Report it as a supplementary return for last.
My worry is I will get fined far more than the deposit, for what is a genuine mistake.
I reported another account with the same institution, I just forgot about the one I didn’t report.
What do you think.
Report this year.
Hola Javier
Thanks for answering questions on this topic.
I have been living in Spain for a few years and last year I submitted modelo 720. I declared approx 60000 Euros distributed in various bank accounts, 65000 euros in stocks and 30000 in real estate bonds.
During 2013 I sold stocks for 40000 Euros and furthermore 10000 Euros of real estate bonds were sold. As a result of this one of my bank accounts have increased with the corresponding amounts.
1. Do I need to declare all my bank accounts although it is only one of them has increased substantially?
2. Do I need to inform about the sale of stocks and bonds eventhough my combined holdings of stocks and bonds have actually decreased?
3. Is it possible to completely remake the declaration and declare all my assets per 31/12 2013, also the ones that have not increased? This would almost be easier and would also give a more complete and coherent view of my holdings outside Spain.
Many thanks
Thomas
You need to declare all accounts. Plus stocks and bond sells only
Instead, Yes it is possible to declare hole new situation
Hello, does a person who receives more than 20,000 euros per year as a private uk pension income have to report with the Modelo 720 each year if they do not spend any of this pension income? Thanks.
If he.she is non tax resident in Spain, there is no obligation for filling.
But if resident, you need to declare it. Unless is a Public servant pension
Hello Javier,
I’m a tax resident in Spain since October 2012 and I submitted the form 720 in 2013 to declare my UK property at the price I bought it in 2006 using the exchange rate used as at 31 December 2012.
I sold my house in the UK in June 2013 and with the proceedings (not entirely used) I bought a property in Spain in July 2013.
1. Do I need to complete the 720 for year 2013 to declare that I do not longer own a property in the UK?
I did not use the entire proceedings of the sale to buy the Spanish property and was left with a profit partially deposited in Spain and partially in UK (but my asset left in the UK is less than €50,000) .
2. Do I need to declare this «profit» using form 720 or something different (renta)?
Many thanks.
Chris
In 2012, You was NOT Spanish tax resident. And as non tax resident, you should have not presented form 720. But as you already did, now declare that it is been sold
Profit should be declared in Renta. (if you are Spanish tax resident)
Hi Javier
I have been in Spain for some of 2013 as the dependent (wife) of a UK Crown Employee (and UK taxpayer) posted abroad. I have had no income of my own for the whole of 2013. Do I need to complete a tax return and/or Module 720 declaration for 2013?
Thanks
Abi
If you are Spanish tax resident, you need to fill form 720.
But, with details you give, seems that you are tax resident in UK. Crown employees remain tax residents in UK even if they are the hole year out of UK, as well as dependent spouse.
Javier,
well I have been trying now for over 10 hours just to push a button and send off this absurd form. Even on two different computers it still just says «processing» and nothing else happens.Yes I do have a certificate and I did manage it last year without this ridiculous problem.
Is there an address where I can post a printout of the form and include a letter explaining what a nightmare sending it is?
Many thanks
Mike
Seems a problema with digital signature applet.
You can send the file to any advisor with certificado for presenting taxes for clientes.
Hi
I had the same problems this year also no problems last year) and in the end I called the tax office and they guided me through this over the phone to change some Internet settings on my PC. One contact said the server is saturated, but this is not the case, so you have to get the right person to help. In the end it worked with Google chrome, not IE. The phone number is on their website.
I hope this helps.
Hi Javier,
Thank you for your help.
I am a tax resident in spain but have a house abroad. At the time of acquisition several years ago the house was greater than 50,000 euro however the house still has a mortgage on it. Since the value of the house that is mine is below 50,000 euro (I still have to pay the bank for the next 20 years) am I still required to complete the Modelo 720?.
Thanks!
Hi Dave,
In Form-720 you declare gross acquisition value. For this form is not relevant if you have a mortgage of 100% or if you paid real estate cash.
This means that Form720 can not be used for stating your wealth.
Yes, you need to fill form 720.
You may have a penalty of 1.500 euros for filling late, but until now, no one of my clients filling late last year, got it.
Hi
We are Spanish residents, but don’t go over the threshold for the modelo 720, but we have never declared any interest we receive on our UK bank accounts (tax is paid in the UK on these) or premium bonds to the Spanish tax man in our annual Spanish declarations.
How can we best resolve this or for this year shall we just declare interest received, how do we declare this when tax has been paid in the UK on savings accounts or shall we just declare the premium bond winnings.
Do we risk them following us up as we have never declared anything abroad before.
Any advise is greatly appreciated.
Thanks Paul
Tax paid in UK for interest is wrongly paid. As you are tax resident in Spain interest is not taxable in UK.
You are guilty because you did not inform your bank when you switch your residence status, so bank is withholding because of did not tell then.
You can claim back this whithholdings to UK.
And Spain will bill you for this unpaid tax
Now you are risking because of agreement for exchange tax information
In Spanish tax return, just add interest in box 022
Hi Javier,
Thanks for keeping up this forum.
I’m not a spanish national and Tax resident for my worldwide income in my own national EU State. I’m divorced since 1996. I travel frequently to Spain (never more then 183 days in a year) to spend as much time with my mental handicapped son as possible, for which I share with my spanish ex wife the “Patria Potestad prorrogada por incapacidad” since his 18th birthday.
Is the Tax Certificate for worldwide income from my own national State sufficient to prove my Tax residency outside of Spain?
Regards
Fil
Yes, it is sufficient. Even if you are more than 183 days in Spain.
Hello !
Just wanted to make sure this is right !
I declared my 720 formular last year and for this year nothing changed and the amount didnt increase … So I dont have to make the declaration again …
Thanks for confirmation .
M.
Yes that is right. You do not need to fill again
I have a UK pension fund that provides me with an annual pension paid into my UK Bank. Do I have to declareon form 720 the full amount in my pension fund or just the annual pension I receive. I am Spanish tax resident and pay Spanish tax on my state pension and private pension.
For 720, you must declare official capitalized amount. This figure is computed with a formula based on your age and yearly payments.
Hi. I wonder if you can help. My parents are residents in Spain however have not completed the tax return previously as they’re income was below the minimum limit needed to fill out the form, however now it appears that they should have filled in the return because their income comes from different sources. However that is not the main problem as that can be fairly easily sorted. The problem is that we were unaware of the obligation to send in form 720 last year . I know ignorance is not an excuse especially where Hacienda is concerned but that’s the way it is. Now I have been reading on the Internet about all the fines that could be imposed even if you send in the form late and am really concerned about my parents losing everything. Should they do the 720 for last year even though it is late or just do this years , late too?
You dont need to fill if all is true:
1./wages pensions… are below 11.200 euros
2./interest dividends capital gains are below 1.000 euros.
If you want, give a call and we check it, may be is some way around.
I have a QROPS based in Malta and is held by Trustees and I have started to drawdown an annuity. I am a Spanish fiscal resident and I would declare the annuity each year on my Renta as income.
Q1.Does the income from the annuity rate for lower rate tax?
Q2. Do I need to complete Modelo 720 as this is not held by me.
Thank you
Yes you need to file form 720
Transfering your pension to qrops in Malta you avoided to pay taxes in UK. But now you pay in your country of residence.
But how this is going to be taxed, needs deeper study
Thank you for your reply but according to you «Pension and declaration of Assets abroad» section of your website you say that British QROPS are not declarable on Modelo 720, only the income from this on the Renta. This was published on March 2 2013. Has this now changed.
pension funds are not declared until you start collecting money from them.
I have been told that I should declare a UK SIPP on the 720 because I am entitled to collect money from it, because I am over the minimum age to take money, even if I have chosen not to take money yet. Is that correct?
You need to declare when you start to collecting money from it.
When the form 720 is again submitted in January 2015 I need to know how to work out values of assets.
The main block is a holding of stocks and shares. These were valued in the last year at their published share price in Sterling and converted into Euros at the EC rate of 31 December. For the coming declaration do I have to value the assets in Euros in a similar manner? The exchange rate can vary significantly from year end to year end.
When reading the Hacienda published document on this I got the impression that the base data for the comparison will always be 31 Dec 2012. More sensibly it should be a comparison of the values from year end to the previous year end to assess the possible increase of the 20000 euros?
Depending upon your answer and on the fact that there are several holdings within the stock list will all of these have to be listed again should their total value exceed a gain/loss of more than 20,000 euros?
Yes, they are valued at asset market value on the Dic 31st of the year to be declared, converted into euros at that date offical rate.
And this year as GBP is revaluating may be you will need to declare because of this exchange rate improvement.
Thank you, your answer is very comprehensive and highlights a mistake made by my assessor for 2013.
My wife and I are separated, but not divorced, does the model 720 need to be filled if our joint bank accounts exceed the 50,000 euro
If you have joint assets and not joint assets, 50.000 limit applies over total value of assets where you participate, not over your % on them.
So if the only asset is a joint bank account of 52.000 you both if Spanish residents should fill form 720. But if you had two not joint account each one with 26.000 you don’t need to feel.
Hi!
My husband is Spanish and I was a resident of Spain in 2012 and 2013. My husband filled out form 720 in 2012 because we have bank accounts in my home country of USA. He filled it out with all the information about our accounts and in 2013, did not have to file because the information did not change by 20,000 euros. However it has just dawned on me that my parents (living in the US) have me as a benificiary on all three of their accounts and as one of 4 authorized holders in another. Did this information have to be included in our past 720? If so, is there a way to go back and amend the 2012 form?
If you are beneficiary just in case of death, you do not need to declare.
But if you are beneficiary now, yes you should amend form 720 (complementaria)
Dear Javier,
I have seen cases on the internet where a Spanish non resident property owner has been asked for a certificate of fiscal residency from the UK for 2012 as the Spanish tax office has deemed the person resident based on electricity readings. But they wrote to him at his Spanish address only giving him 10 days to produce it, my questions are.
1. What happens if I am asked for one as a non resident and I am in the UK for periods of 3-4 months, I would not see the letter from the Tax office until it is too late, also the UK tax office takes longer than 10 days to produce the certificate, and sometimes will not issue one unless there is an income in Spain?
2. Is the Spanish tax office now checking all non residents utility bills?
Comments appreciated,
Bill
Letters arrive by certificate post, so if you are not it cannot be delivered so 10 days time cannot start.
Postman will leave a warning that a certificate was send to you.
After approx 3 months Tax Authority will publish notification on The Spanish Official Newspaper (BOE.ES) so 10 days count will start after this is published.
If they say you are Spanish resident and you do not comply, then will be assumed that you are Spanish tax resident.
In most of cases this is an easy issue as Tax Authories apply internal Spanish regulation instead of Tax Convention, so it is VERY important to answer this letter for claiming your non residence.
It is also VERY important, to fill Spanish declarations as non resident for your real estate. Becouse this also can be used for supporting your non residency status.
If you have a digital ID you can register to receive email notifications of mail. Once you access the mail online the 10 day clock starts ticking. You can write them a letter saying you have applied for the certificate and upload this online. When you receive the certificate you can also upload this online.
For people (not companies) they send you by certificate mail, even if you have digital certificate.
With digital certificate you can see at AEAT page, that you have a cetificate, but only when you sign with certificate reception, you will be able to see the letter and in that moment starts counting time.
Hi Javier
They must have changed the system then becuase there is an option in the electronic office to accept service of the letter online. I actually did this earlier this year and dealt with the letter online, all whilst I was in the UK. Once you open the letter online the clock starts ticking and a letter (which they do not send my mail) confirming ou have opened it electronically appears in your record. This is from the acknowledgement letter I received. My name and NE appear as well, but I have redacted those.
RECIBO DE PRESENTACIÓN EN LA NOTIFICACIÓN MEDIANTE COMPARECENCIA ELECTRÓNICA EN LA SEDE ELECTRÓNICA DE LA AGENCIA TRIBUTARIA.
XXXXXX XXXXXX XXXXXX X1234567N, en calidad de titular, ha accedido en la sede electrónica de la Agencia Estatal de Administración Tributaria al contenido del acto objeto de notificación, con fecha 05-09-2014 y hora 19:04:01, por lo que en esa fecha se han producido los efectos de la notificación
Yes, becouse you signed for «notificaciones electronicas» so they do not send letter by traditional mail.
This system is mandatory for autonomos and companies.
Best system is not to sign for «notificaciones electrónicas», so they always need to send it by mail, even if you signed acknowledgment with certificado digital. So in case you losse your certificado digital or if you do not check on the computer you still receiving letters by mail.
Hello, I’ve never had to file a Modelo 720 but this year my assests are at or just over the 50.000€ limit. I have a questions whether or not I will need to file the 720:
1. When calculating if the value of a savings account and a value of securities is greater than 50.000€, is the value on 31 Dec. the valuation to be used or is the average balance for the last quarter of the year to be used?
2. If I have 55.000€ in a foreign savings account on 1 Dec. and on 26 Dec. I purchase €15.000 in securities, leaving 40.000€ in the savings account and €15,000 in securities, will I need to file the 720 if the end of year savings account balance is less than 50.000€ (even though it was greater than 50.000€ at the beginning of December)?
3. I have a foreign stock brokerage account with a balance of 48.000€ in stocks and 4000€ in cash savings. The total balance of the account is over 50.000€ but the stock portion is less than 50.000€. Do I need to declare this brokerage account as being greater than 50.000€ even if part is in cash savings?
Many thanks for your response.
Dear Tony,
Form 720 is like 3 different declarations in one form, one for accounts in finnancial institutions, one for stocks bonds investment funds and insurance policies, and de last one for real estate. Limit of 50.000 applies for each declaration, if bank accounts and real estate each group dont reach 50.000 euros you do not declare no one of this two blocks.
Bank accounts, must be declared if balance by 31st December or average balance of last quarter exceeds 50.000.
In your example, if transfering value from bank account to shares before the end of year, make bank accounts balance under 50.000, then you dont need to declare bank accounts, unless average balance 4th Q exceeds 50.000
For bank accounts you need to add balance of all bank current, saving and term accounts plus liquidity in your broker account.
Hi. I filed a 720 last year (in Gipuzkoa) as had more than E50K in bank accounts. This money has been used to buy a property (in Spain) and now I have no sizable assets outside of Spain. Do I still have to file a 720 declaration or do something else?
Thanks
If you closed de bank account, yes. Otherwise not.
My husband and I both have civil servants’ pensions from the UK wbich I understand have to be paid and taxed in the UK. As such do we have to declare them on the 720 ?
Public servants pension are never declared in 720.
Really useful site especially the questions and answers but could I query question/s in Feb/March from Christine & Irving Duncan?
Surely if you live most of the time in Spain i.e.over 183 days you must be tax resident here and getting a tax residence certificate from HMRC should not, as you suggest, allow them to live here in Spain a d simply declare & pay taxes in UK?
I didn’t understand this to be true but are you saying you can choose to continue to pay taxes in UK and not in Spain?
In that case for days you are tax resident in Spain according to Spanish tax regulations.
If in UK you are also resident according to UK tax regulations, then there is a residency conflict.
This conflict of double residency is solve by tax convention.
Tax convention, has higher rank than UK and Spains tax regulations.
Tax convention says that in casa of residency conflict, domestic regulations do not apply, and instead applies article 4th of tax convention.
Under tax convention in many cases you are resident of the country where is your personal and economical centre. Even if you live 365 days in the other country.
Buenos dias Javier y gracias por estas informaciones.
Con respeto a su ultma respuesta, como es posible saber cuales sono los casos en que.. «you are resident of the country where is your personal and economical centre. Even if you live 365 days in the other country…»?
Check, article 4th of Double Taxation Agreement.
Declare en 2012 datos de una cuenta bancaria. El ano pasado el banco ha cambiado de direccion. Todos los demas datos son iguales. Tengo que notificar Hacienda del cambio? Si la respuesta es si, como se hace. No es cuestion de modificar algo, porque la direccion era correcta en 2012. Es que uno de los datos han cambiado en al ano 2014. Que hago? Nada? Algo?
Muchas gracias
Hasta que no tengas que volver a declarar el 7 no tienes que actualizar esto.
Where do I obtain a form 720? Can it be downloaded? Having recently arrived in Spain, I do have a NIE but no tax number.
First you need to activate your NIE as tax number filling form 030.
720 cannot be downloaded, must be filled by Internet.
For 720 get advise from us or any other advisors, as penalties for mistakes are quite big.
What if you are joint owner of a property (one is tax resident Spain – the other is not), and the house has a 50% joint ownership, but you have never resided in the house and your share does not exceed the 50,000 euro at purchase (or should this be at todays value) ? Do you need to declare
You need to declare it in form 720 if real estate acquisition value (100%) is over 50.000 €, even if you have only 50%.
But also the non resident one needs to pay taxes for owning real estate in Spain, it is a small tax, about 0,27% of cadaster value per year. For this a form 210 must be fill.
Dear Javier,
Thanks for your excellent Blog.
Is it true that if you have lend out money to a friend say in 2013 which would be obliged to report in the 720 form on 31/12/13 is not reportable because it is not in an acccount in your own name because the balance is less then 50000. When the money is returned in 2014 it will show on the 720 on 31/12/2014 or if lend again will not show again?
Thanks Vil
You report balance on financial institutions. But not private credits or loans.
I have a flat in the Uk bought in 1992 for less than 50000 euros. I checked the land registry but theres no value listed. According to th HMland registry website they dont show the purchase price on properties bought before 2000.
What do I need to to to show adquisition value?
The previous owner renewed the 99 year lease in 1990 and the value stated on the lease is 30000. Would that be accepted although it was 2 years earlier?
What other ways are there of showing adquisition value on propertys purchased pre 2000?
Thanks in advance
in 720 form you declare acquisition value, that you say is under 50.000€, so you dont need to fill this form for this real estate.
This acquisition value is the one stated in Deed, or sell purchase agreement, and do not change in the future, you will always declare for the same value.
What is unacceptable with this law, firstly it discriminates against non Spanish nationals, secondly if you have a joint bank account and your participation is 50% of the balance the sum in euros could be under the 50k rule and therefore you would not need to complete the 720 in the first place. This is simply a scam by the Spanish Tax authorities to fine you a amount far in excess of the crime of late reporting. This has been reported to the European courts that Spain once again is in error. Shame on you Spain yer again you cannot be trusted.
Sorry, but discriminates Spanish residents with asets abroad, Spanish citizens and non Spanish citizens.
European comision started infraction process against Spain on the 19th November. Lets see in the following months what will happen
We will keep posting news on mayor Spanish Journals.
I shall be submitting Form 720 for the first time as a new fiscal resident of Spain in 2015. I have threebank accounts in three separate countries. Do I report them all on the same form or a separate form for each?
Only one form, for the three accounts.
Javier,
Thank you very much for your informative blog. My wife and I are U.S. citizens and residents who are planning to spend about 11 months in Spain. We plan to arrive in Spain in early August 2016 (possibly with a week-long visit in July to find an apartment) and to return to the United States in mid-June 2017. We will travel to Spain on a non-lucrative visa and do not plan to work in Spain. We would rent an apartment, open a bank account and sign up for utilities. I expect we also would need to obtain an NIE and apply for a “residency” permit.
My understanding is that, with this schedule and plan, we would NOT be tax-residents of Spain and would NOT be obligated to file a form 720 in 2016 or 2017 or pay the wealth tax on non-Spanish assets. Is that correct?
Also, do you have suggestions about how we should complete various forms (e.g., our applications for residency permits and NIEs) to minimize the risk that Spanish authorities will claim that we are tax residents (or is that not a real risk)? Is there anything we should obtain in advance in the U.S. to confirm our status as U.S. tax residents (I am not sure if such documentation exists).
Thank you in advance and best regards
Bruce,
Here I send you a link to the main requirements you have to meet before coming to Spain.
http://www.exteriores.gob.es/Consulados/CHICAGO/es/ServiciosConsulares/Serviciosconsularesenchicago/Documents/documentosvisados/nolucrativa.pdf
Regarding the tax issue, and taking into account your schedule and plan, you wouldn’t be considered a tax resident in Spain and therefore there would be no obligation for you to file any form 720 or pay any wealth tax on non-Spanish assets.
You should also get the Form 6166 (Certification of U.S. Tax Residency) from the Philadelphia Accounts Management Center by submitting the Form 8802. Better safe than sorry.
Here I send you the link:
https://www.irs.gov/individuals/international-taxpayers/form-6166-certification-of-u-s-tax-residency
Hello. I inherited a 50% share of a property in the U.K. Last year. I am tax resident in Spain. Does this property need to be declared in the M720? It was not an acquisition but obviously has value. Many thanks
Yes, it needs to be declared in the form 720, however the way you ended up owning it.
I am new to this modelo 720. My wife and myself moved to Spain last July and have a house worth more than 100 000 euros in england. We rent house in England but our joint bank savings n England are less than 50 000 euros. We know we have to declare house but do we also need to declare savings on form 720 and do we have to declare rent on form 720.
Only, Spanish tax residents must fill 720 form.
Tax residency in Spain is either you are resident 365 days of calendar year or no one. Is not possible to be resident only part of the year.
So if in 2016 you were resident in Spain fro more than 183 then you may qualify for tax residency.
If you arrived to Spain after the 2nd of July, then you was less than 183 days, so 2016 you are non-resident.
El ano pasado presente mi 720 en relacion a una propiedad que tenia en el extranjero en 2015. En 2016 la vendi. Tengo ahora en 2017 que presentar de nuevo mi 720 en relacion a 2016 aunque en ese ano vendiese la propiedad? Gracias
Las cancelaciones (ventas, donaciones, extinciones,…) hay que declararlas siempre en el 720.
Last year my wife and I reorganised our banking out of Spain, closing four accounts and opening one new one. We did not not exceed the 20k increase in our assets. What do we need to declare this year? Thanks.
Closings must always be declared in case what has been closed had been previously declared.
I am facing the need to file my first ever Modelo 720 for 2018.
I am intending to close unnecessary accounts and cash in some unwanted fondos de inversion outside of Spain before the end of the year.
Even after this i will still be over 50,000€ in both categories and so need to report.
My question is whether i need to report the closure of accounts in 2018 for which there was never a requirement to declare before 2018.
You will just report what you still having by 31 December 2018.
Hola Javier:
La última vez cuando hemos tenido que hacer el Modelo 720 ha sido para el año 2014. Desde entonces nuestros fondos en el extranjero han reducido. Por eso hemos consolidado el restante del dinero en solo dos de las cuentas originales y hemos cerrado las otras tres durante 2017.
¿A pesar del hecho que ahora tenemos menos dinero tenemos que declarar el Modelo 720 para 2017? Como entiendo lo que he leido parece que si pero no entiendo el porque.
Tendrá que declarar el cierre de las cuentas que ya ha declarado en años anteriores.
Hi there! I have a question about reinvesting the gains from a sale of a primary residence in Spain. We are currently living in our primary residence in Spain where we are currently also fiscal residents. We would like to sell our home and reinvest the gains on a new primary residence in the US. I know that when we sell in Spain we are allowed two years to reinvest the gains in another primary residence in Spain or Europe. But in our case we would be moving to the US for work and that is where we would like to reinvest. Is this possible or will we have to pay capital gains on the sale because the reinvestment will be done in the US?
Yes, it is possible to reinvest in a primary residency, in another country.
From the date of selling at the notary you have until the same date two years after, to reinvest. You will need to get a public or official document for proving that you did in time.
Try to do it faster, so you keep your spanish tax residency.
So it makes no difference that the country is outside the EU?
Finally, what are the tax implications if I don’t reinvest quickly as you suggest. In other words, when I am no longer a tax resident of Spain. I am asking because I would likely like to wait a year before reinvesting, and by then I would no longer be a Spanish tax resident. Why does the timing matter if the reinvestment is done within the 2 year period?
Exempion for reinvesting in first residency is in Inconme Tax Law for residents.
This expemtion is granted in tax year that you sell your residency. Even if you dont fulfil yet reinvesting, but you plan to do it before this two years time.
Does not matter if you move after selling abroad, and you reinvest abroad in a new first residency, as long as new residency is at least same price as the price of selling old one, and as long as you buy a new residency within this two year time.
IF this sell happens 22nd Dec 2018, on your tax return for 2018 you need to state capital gain, and apply for exempion in this capital gain claiming you plan to reinvest.
It is ok if you reinvest in a different country or even as non resident, as long as you do before 22 Dec 2020.
If you do it after this date, you will need to amend your tax return for 2018 and pay tax for this invalid reinvesting exemption.
Hi Javier,
I have been resident in the UK for several years 2010 to 2017, but I´m resident in Spain from 2018. As I have more than 50k in cash and stocks I have to do the 720.
I have a couple of doubts:
1) How should I declare the cash parked in my broker (Interactive Brokers), as I don’t have an IBAN for that cash. And it’s also in 5 different currencies.
2) How should I declare the cash I have in Premium Bonds and Income Bonds with the UK National Savings and Investments service? https://nsandi.com I talked to them and they can´t provide an IBAN for those accounts.
Hope you can help me, I’m sure many spaniards and british living in Spain should have the same issues.
Kind regards.
Stocks and liquidity are declared with different codes.
Liquidity in brokerage account is declared as account without IBAN,
Bonds are declared with ISIN code. Premium Bonds do not have ISIN, so declare them with code 2 and number of your account en NSI
How do I calculate the average balance for a bank account to report in the modelo 720? Some of my bank accounts are open for many many years…what do I input for the opening date of the account when I have no idea what the date is?
Average balance is not mandatory if your bank does not calculation of it.
But oppening date of account is an IMPORTANT data. You must find it, bank for sure has, as all banking contracts are stored and dated.
Hi, we have some rental properties in Spain where we are currently residing. We are thinking about moving outside of Europe in the future. If we do go abroad, I understand that we would have to file a non-resident tax form on our earnings from the properties. My question is, the declaration of income would be net, right? I mean income minus expenses, correct?
Yes. Unfortunately.
For EU residents base of tax is profit (income minus expenses) and is taxed at 19%
For NON EU residents base of tax is income and is taxed at 24%
Hi
We own a property in London I bought it in 2005 for GBP 295,000 (304,837 including taxes). It is not freehold we own a lease until 2112 (103 years). We can convert to freehold by paying about GBP 20k now, this price increases with time. If the freehold owner (us for now) doesn’t pay it the house reverts back to the freehold owner in 2112.
On 11 December 2017 my wife’s name was added to the property as a ‘joint tenant’ this was before we moved to Spain. She did not pay for this and in the registry the official price paid is still the price I paid in 2005 (295k)
In the UK a ‘joint tenant’ means you
you have equal rights to the whole property
the property automatically goes to the other owners if you die
you cannot pass on your ownership of the property in your will
So you could say we both own the property 100% and at the same time 0%. The other joint ownership type in the UK lists exactly the % owned by each person
Do we have different acquisition dates and valuations? What % do we each own?
It is a leasehold property, we do not own the freehold. Do we value it using the usufruct tables based on our age?
Or in other words what would you fill in for each of us in the modelo 720?
We presently live in Madrid but will one day move to Andalucia so I don’t want to overvalue the property in case we have to pay wealth tax
Yes you have different acquisition prices. Each one valuation price of 100% of the real estate when registered as owner.
In this case I will register it in 720 for as 50% and 50%.
Yes as you both are as owners in property registry both should fill 720
In 720 form you report 100% of asset value.
In wealth tax each declare only valuation of his/her percentage. And there is an exempion of wealtax for 700.000 for each one of you. And now exchange rate is almost 1,1 euro per GBP
Are cash ISAs and Premium Bonds under a different category? C2 and V2 respectively?
In which case, if each of those does not reach €50,000, none needs to be declared?
Thanks!
Hola,
I have more than 50,000 euros worth in bank accounts outside Spain, so I understand that I have to declare this. I also have some shares held in the UK. Do I have to declare only under the bank account category in modelo 720? Or will I also need to declare the shares under investments?
Many thanks.
Hola,
I have more than 50,ooo euros worth in bank accounts outside Spain and I understand that I have to declare this in the modelo 720. I also have around 7,000 euros worth in stocks, so do I also have to declare anything in the investments category or do I declare only the bank account category (which is the only category where I will exceed 50,ooo)?
Many thanks,
Jeff
Hola Javier,
I am completing the modelo 720 for the first time and need to declare savings accounts with a total exceeding 50,ooo euros over the last quarter and on 31 December. I closed three savings accounts in September – do I need to declare them with details of the closing date and balance etc? Or can I simply not declare these three on the form?
Many thanks,
Jeff
As you declare for the first time you will declare ONLY the assets you have on the 31st December 2019. But you do not declare any asset you stopped having it on the 30th December or earlier.
Hello,
am gathering information to fill modelo 720 for the first time since am now resident in Spain. I have a portfolio of rental properties in the UK and have doubts:
– from the acquisition value, can we deduct purchase expenses?
– what sort of supporting documentation needs to be provided in the declaration (ie proof of purchase price , expenses , etc) and do they need to be translated to Spanish?
thanks in advance
Elena
Acquisition value = price paid on acquisition + expenses for acquiring ; this original acquisition value will be converted in Euros at official rate for year you declare.
For filling you do not need to provide any document.
But in case of audit you will need documents translated to prove what you declared.
Hello Javier,
In my 2018 declaration I reported a holding of 100 shares in Company X. In April 2019 I acquired a further 20 shares through dividend reinvestment. Then in November 2019 I sold all 120 shares. Could you please clarify how I should declare this in the Modelo 720 for 2019.
Many thanks,
Alan
As 20 was not previously declared. Now you need to declare that you sold what you previously declared, this is 100
In 2019 I sold a house (250k euros) which I bought in 1978 (70k euros) .
For my 720 I understand that my «gastos» can be added when reporting the acquisition value, but I am not sure whether my «gastos» can be subtracted when reporting the transmission value.
Since gastos are taken into account when calculating the capital gain for my IRPF it seems logical that my 720 should indicate the same.
Please can you confirm?
yes,
as acquisition tax value is price paid PLUS expenses
selling tax value is selling price MINUS expenses.
Thankyou for your excellent blog.
I have previously submitted Form 720. In category V I have 11 separate investments. Can you advise on two issues:-
1) One of my funds changed its name and ISIN in 2019 after a fund merger – do I have to report this on Form 720 by putting a closing date against the old fund name and create a new record under the new fund name?
2) All 11 investments have increased in value since I last submitted 720 – most by small amounts (between 500 – 2.000€) but one by over 20.000€. Do I need to update the values for ALL 11 investments or just the one that increased by over 20.000€ ?
Many thanks.
1.- dont present just for this change, next time you fill this form modify information in this invesment
2.- if total value of al assets you have by end of 2019 increased more than 20.000 over valuation of all assets you had last time you fill form 720, then you need to declare again ALL assets
Thank you.
Good afternoon:
I submitted the modelo 720 last year,I have to summit it again this year because some change on my bank account. I have Copy of last year’s filing, so I think I will summit it myself this time, I will be really appreciate if you can teach me:
– What number or information do I need to put in the form, so they will know it’s me fill the form again, and make all the changes.
– Do I need sent the scan copy of the bank statement, or only need fill in the amount of the money in the form.
-I heard I will require a digital signature, is it a special kind of the signature for spanish tax purposes? how do I get that?
Many thanks
Claire
personal information required is just full name and tax number (DNI or NIF)
also be sure you fill for year 2019
you don´t need to attach any document but you can if you want.
for filling requires identify with you digital certificate, but if you don´t have it already will be imposible to obtain it now due to corona-virus situation.
All tax advisers we have special digital certificate that can be used to fill in the name of clients. For this year for sure you will need service of a tax adviser for this.
Thank you for this helpful post! I have a question in case you are able to help me at this difficult time.
I have a single property outside of Spain and have previously filed a modelo 720 for it. According to information from my home council body, the value of the property has increased from what I paid for it in 2013. However, this is just the recommended value and I still own the property and do not intend to sell it.
When I look at all the information for the modelo 720, it is interested in the acquisition price for the property, and only the acquisition price. That has not changed. My assumption is that I do not need to file another modelo 720. Is that correct?
Valuation for 720, is acquisition price. As long as you dont sell it, or buy another one, you do not need to fill again 720 form.
Thank you very much for confirming. Sending my best wishes for you and your loved ones.
Hello Javier,
We declared all accounts and funds in 2018, but now have opened many new accounts to disperse and split up the money in the previously declared joint accounts. Also, in April 2019 we sold a fund that was jointly held and split that money into the new accounts. I have two questions;
1. If any joint accounts were not closed and are still in both names, but are now holding the money of only one account holder, do both parties have to enter a 720? One showing 100% and the other showing 0%?
2. Since the joint fund was liquidated and the monies removed, does each party still need to submit a 720 showing the amount and date when the fund was sold?
Just to say that your website has been very helpful on how to deal with the Modelo 720. Many Thanks for that.
Hoping to hear back before the deadline,
Very Best Regards,
Frank
Hi Javier,
Is a holding of Bitcoin regarded by the Agencia Tributaria as an overseas or an onshore investment? As you know, Bitcoin exists in cyberspace and does not have a physical location.
Best regards
Peter Kendal
in 720 form, you report accounts, stoks, investment funds, insurance, real estate.
But you do not report: picasso´s, helicopters, cars, gold, diamonds, bank notes, derivaties, or bitcoins…
Good morning,
I have completed form 720 for the first time for 2019 fiscal year as I had savings worth more than 50k from foreign savings accounts. I am now completing the interest on modelo 100 and I want to be sure that Hacienda can recognize that the information on modelos 100 and 720 are consistent. I understand that in Box 27 of modelo 100 all my Spanish and foreign interest is added together (the foreign interest was not taxed or liable to tax abroad). But when you go to enter the details there is a facility for multiple entries, «alta capital mobiliario». There is no explanation here- should each entry here be a different bank account or different financial institution or maybe something else?
Hoping you are able to advise on this. Many thanks. Jeff
Hello Jeff,
you can add a new rendimiento, for your internal reference, even box 0027 will display total figure. Tax office computer will find that you declared more money than what they know.
Dont worry it is right how you are doing.
Hola,
Thanks a lot for your reply, but unfortunately I’m still not certain how best to do this…perhaps I’m worrying too much.
I’m concerned that Hacienda will expect to see lots of separate entries in casilla 27 to match with the seven accounts I declared in the 720. If so, this might confuse them as there would be more entries than accounts declared on the 720 because I also had interest from two foreign accounts that I closed during the year (which were not declared on the 720).
Alternatively, would it be possible simply to add up all the foreign account interest and enter it as one single»capital mobiliario»?
Many thanks
Jeff
Jeff, dont worry, Hacienda cannot expect to see lots of entries in Box 27, as this box do not allows for separate entries, you can add all directely
Javier, my name is Jim from the US my wife and I forgot to file our modelo 720 this year. While trying to understand what to do next I realized that my accountant has been declaring our 401k’s and IRA’s on our 720 and that this is possibly incorrect. The only reason to file again this year is gains related to those accounts. After reading your blog I thought you might have an opinion on how we should proceed. Do we file late including the information on our retirement accounts? Or do we not file and stop reporting on these accounts? thank you in advance jim
Keep doing so. In my understanding IRA in Spain is has not the treatment that has in USA, so treating it in Spain as an standard brokerage account will save you a lot of taxes by the time you start collecting money from IRA
Im confused in Planes de pensiones y declaración de bienes en el extranjero you said Los planes 401(K), de Estados Unidos sí son planes de pensiones: NO hay que declararlos. Así como tampoco, los “deductible IRA (Individual Retirement Account).
This is not black and white.
There is also a new Convention between USA and Spain that started to work in November 2019.
I am the beneficiary of a trust in the USA my mother has created – 50% of it. My mother is still alive, I receive no income from it. It is an inheritance. Does this need to be declared in Modelo 720? I am not sure if I became a beneficiary before or after I became a Spain tax resident. Thank you.
Depends.
Revocable or Irrevocable?
and if you are settlor, beneficiary, or beneficiary in case of death
Hello Javier
I am completing my first modelo 720 and just want to check that I only complete for the categories that total over 50000 Euros. For example the total of my bank accounts abroad are above this limit so I include them in the bank account category of the form. I also own a small number of shares (my only investment abroad) worth only around 700 Euros. As this is below the 50k limit for this category I am not planning on including them. Is this correct?
Thanks
Andy
Yes is correct.
You only declare all assets within a category if the total valuation of this category is over 50.000€
https://www.iberley.es/resoluciones/resolucion-vinculante-dgt-v1049-19-16-05-2019-1523964
Hi Javier
I wonder if I could have your opinion on the above regarding private pensions located outside the EU. My understanding from the above ruling is that pensions must be reported on 720 and for wealth tax if the pension is accessible. In other words if the conditions have been met and I can withdraw from my pension ( I am old enough or an illness event happens) then I should declare it for 720 and Wealth tax.
If my understanding is correct then how do I value the pension? My pension is a defined benefit pension which means I get an amount every year (that rises with inflation) and there is no monetary lump sum value that I can take.
Additionally I have a purchased annuity. I paid in money for 10 years from my after tax salary and now I receive about 1,500 EUR per year for the rest of my life. How do I value this for the purposes of 720 and Wealth Tax?
Muchismos gracias por to ayuda
If it´s a pension fund when you put money in, you should have right to reduce your taxable base, and when you take money back then you will be taxed. Pension Funds are not reported in 720 form
Annuities are valuated at actuarial value until you start getting your money back, after this moment there is a formula for capitalizing your annuity based on the legal interest (3.00%) and your age
The last annuity you bought with after tax money, will be taxed in the saving base. Every year you revive the annuity, part is due to the money you used to buy it, and a small part due to increase in value of this investment, only the part due to increase in value is going to be taxed, and will be taxed at savings rate