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The Modelo 720 (Overseas Asset Declaration) Is it legal or not?

Sadly, I have to tell them they are now wrong on both counts. Firstly, on 15 February 2017, the European Commission accepted that Spain has the right to require residents to declare overseas assets, however, what the Commission does disagree with is the severity of punishments for late or inaccurate submissions. The EU commission has given the Spanish authorities 2 months to rectify this, otherwise it will take the matter to the EU Court of Justice. The requirement to submit the Modelo 720 form, however, is not under challenge.

Secondly, on the 31 May 2017, all EU countries, plus the UK and its Crown Dependencies and Overseas Territories, will automatically share all financial information on all financial assets held in their countries by tax residents of another country, to the country they are registered as being resident in.

As of 31 December 2016, these countries, dependencies and territories will report the value of all bank accounts, insurance policies, shareholdings, investments, and trusts, etc (regardless of the balance). Additionally, they will also notify them of what withdrawals have been made during 2016 and if an account has been closed during the year.

From May 2018, over 100 countries worldwide will automatically be sharing all financial information on an annual basis. The goal is to allow tax authorities to obtain a clearer understanding of financial assets held abroad by their residents, for tax purposes, and is primarily aimed at preventing tax evasion.

There are ways to ease this reporting burden and to ensure you stay on the right side of the taxman, whilst minimising your tax liabilities, one such way is to use a tax compliant investment bond.

Other News

Spotlight on … Luke Hunt – Associate Director

Luke HuntHow / why did you get into your line of work in the financial services sector?

Back in 2007, I was looking for a new challenge and saw an advertisement for a trainee financial advisor role in Kuala Lumpur, Malaysia. Without informing my family or even my girlfriend at the time, I applied and a couple of interviews later and I was offered the job. I flew out there with my girlfriend and ultimately it turned into a lifechanging 5 years. Here I am still doing the job I love 14 years later!

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Expat Financial Advice a Must When Returning to UK

SuitcasesAs the “will they, won’t they” saga of Brexit rumbles on it is useful to look at some of the things expats can actually do to reaffirm their ties with the UK in the event that they plan to move back to Blighty at some point in the future.

The issue has taken on a new urgency for expats, particularly in regards to property, in light of the new surcharge that the government plans to introduce alongside stamp duty on second home and buy-to-let purchases in England.

Although Prime Minister Theresa May says that the surcharge is for “foreign buyers” and is being introduced with a view to assisting UK taxpayers buy a property – especially first-time buyers – it may have some unintended consequences.

This is because it is not just foreign buyers who are likely to find their pockets hit by the tax. Returning expats – who could well be a prominent demographic over the next few years – may also find themselves liable for the surcharge, potentially setting them back significantly on their way to reaching their wealth management objectives.

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