Are you Modelo 720 Ready?

The Modelo 720 is an informative declaration made to the Spanish authorities advising them of any asset an individual holds outside of Spain, with a value of 50.000€ or more. This declaration has to be made before the 31st March and is in relation to the value of the assets as of the 31st December the previous calendar year. Any asset held within Spain does not need

to be declared as it will already be known to authorities.

Modelo 720 has 3 reporting categories, split into bank accounts, investments and immovable property and the limit of 50.000€ applies to each. If the asset in question is in a different currency, the exchange rate will determine whether or not there is a need to declare. For example, if an individual has 30,000 pounds in a UK bank account, this would not need to be declared as with the current exchange rate, this would be equivalent to approximately 33,000€ and therefore short of the 50.000€ requirement.

Many individuals have bank accounts or investments that are held in joint names with a partner. If this is the case, each person must declare the asset as if they held it individually, stating the full amount and their percentage of ownership.
Once an asset has been declared, there is no need to declare again in later years, unless the value of the asset has changed by more than 20,000€ or the asset has been sold or closed down.
As with many declarations worldwide, there are fines that an individual could face if they fail to provide the information requested. These fines could be imposed due to late submission of the declaration or for misleading or false information.

Are you Modelo 720 ready?

31st March is the deadline by which residents in Spain need to submit their annual Form 720 (‘Modelo 720’) listing their overseas assets, where applicable. If you have previously submitted a form, you only need to declare assets if they have grown a certain amount or you have sold or closed them.

Besides confirming what you have to declare this year on Modelo 720, this is also a good time to consider whether you are holding your assets in the most tax-efficient vehicles for Spain. If you have investments that were set up with UK taxation in mind, you may be paying more tax in Spain than you need be.

Summary of the rules

Modelo 720 has three reporting categories, based on bank accounts, investments and immovable property. You have to report all assets in a particular category if the value of your total assets in it amounts to over €50,000. This only applies to assets located outside Spain.

In general, you are obliged to report assets if you are the owner, a settlor of a trust, an effective beneficiary from a trust, authorised signatory, or you have the authority to dispose of the asset. This includes assets held by a company, trust or fiduciary.

You need to report even if your personal share of assets is less than €50,000. With joint assets, each owner needs to declare the full value (not pro-rated) and indicate their percentage of ownership.

In most cases, assets are valued using the wealth tax rules as at 31st December each year. For assets held within financial institutions (eg bank accounts), you also need to declare the average balance over the last three months of the year.

You need to report the value of the assets in Euros, so any investments held in other currencies need to be converted using the official exchange rate as at 31st December of the relevant year.

We can help.. We have trusted associates who can ensure your assets are in order and declared correctly.

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