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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

Oil, Markets, Brexit: Now is the time to get things right

The last couple of weeks havbrexite started to show that the markets could be ready to start that long journey to recovery and start to give patient investors some joy.

Oil has bounced back up in value by getting back over the $40 a barrel mark after dropping to $28 a barrel.  While this surge has not yet been reflected in the prices of oil and other related companies, if the price maintains – or even starts to recover further – you can expect to see some share prices rise and dividends increase very soon.

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UK Pensions – Act Now!

CoinsHSBC and The Local Government Pension Scheme are the latest Defined Benefit Pension Schemes to cause upset and worry to thousands of soon-to-be retirees.

Firstly, HSBC has come under fire for cutting the pension payouts of its former staff by up to £2,500 a year, affecting 50,000 members who joined the company between 1975 and 1996. This group had opted to pay less national insurance (NI) contributions whilst working by “contracting out” of the former state pension scheme. This meant that HSBC also paid less NI contributions. In exchange for paying a lower rate, the bank agreed to pay staff a guaranteed minimum pension when they came to retire. Payment records were however not properly maintained leading pensioners to be either overpaid or underpaid. Numerous firms, including HSBC, had used this arrangement and when the errors were discovered, some began to cut pension payouts to compensate for the overpayment.  

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