ChiFRA

In the 2015 UK summer budget Chancellor George Osborne introduced his ‘family home allowance’, increasing the inheritance tax threshold to a potential £1m. Inheritance tax is considered one of the most unfair taxes in the UK. Many people resent the government taking the hard-earned money they want to leave to loved ones – money they have already paid tax on. So the fact that most family homes will now be exempt from the tax is welcome. 

It is good news even if you live in Spain, as the new allowance can apply to property outside the UK, if you meet certain conditions.

Chancellor George Osborne presented his Autumn Statement, along with the Spending Review, on 25^th November.  It did not include many tax changes this time. This article summarises the announcements that may affect expatiates, depending on your situation.

In 2012 the Spanish government announced that everyone resident in Spain will need to start declaring all their overseas assets worth over €50,000.  Modelo 720 (Form 720) was created for this purpose, and this obligation is separate from, and extra to, the annual income tax and wealth tax returns.  The penalties for failing to report assets are very high.

Earlier this year the European Commission (EC) reviewed the legality of Modelo 720 after several complaints submitted by different parties, including law firms and tax adviser associations in Spain.

With the Common Reporting Standard – the new global regime for the automatic exchange of financial information – commencing in January, this is a good time to review your tax planning to ensure it is fully compliant in Spain and also that it is as effective as it can be. 

Tax efficient investment wrappers, offered through a Spanish compliant bond, can be very effective in Spain.  You can hold different types of investment within a bond, and they provide considerable tax advantages as well as succession planning benefits.