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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.

This communication is for informational purposes only and is not intended to constitute, and should not be construed as, investment advice, investment recommendations or investment research. You should seek advice from a professional adviser before embarking on any financial planning activity. Whilst every effort has been made to ensure the information contained in this communication is correct, we are not responsible for any errors or omissions.

Other News

Portugal Inspires Italy’s Flat-Rate Tax Regime for Expats

50 Euro NotesExpat financial advice is a must for any British expat living in Portugal, Spain or Italy to ensure they meet their cross-border taxation obligations while also making the most of the financial growth and preservation opportunities available to them.

However, there is no off-the-shelf recipe for success in this regard. Instead, expat financial advisers need to take full account of every client’s individual circumstances before recommending any product or strategy.

Furthermore, the parameters affecting expat investors are subject to jurisdictional differences and change, so it is not only essential that expat financial advisers stay abreast of their clients’ changing needs and circumstances but also the changing legal and regulatory environment in which their investments operate.

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Brexit? What should I do about Tax and Residencia?

Spain flag and victory signBy now you are probably really fed up hearing about Brexit!  Yet, it’s important that you are prepared financially; not just for a Deal or NO Deal Brexit, but also by being ready to meet the Spanish requirements for living in the country. 

You will have, no doubt, heard lots of horror stories about what Brexit means either way for UK expats and I do not intend to go into that here. Having said that, please read on, as I explain some fundamental issues that may need your attention sooner, rather than later.

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