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.
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