# Asset declaration



## Stravinsky (Aug 12, 2007)

Ive not been on the forums so much as been back in the since around August, but one thing I have clearly missed is the UK asset declaration for tax laws.

I've always been aware that in the event of death IHT would kick in, but now I hear that due to a November law, we have to declare all our UK and overseas assets which may well be subjected to 10% tax. That means for someone who has a £200,000 house in the UK, £20k tax????!!!! Pension pots, investments (all of which will probably have gone down since they were invested) ... 10% of the value in tax.

Please tell me that its not true, because if it is then my next trip back to Spain will be to cancel my residency and move back here!


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## xicoalc (Apr 20, 2010)

Stravinsky said:


> Ive not been on the forums so much as been back in the since around August, but one thing I have clearly missed is the UK asset declaration for tax laws.
> 
> I've always been aware that in the event of death IHT would kick in, but now I hear that due to a November law, we have to declare all our UK and overseas assets which may well be subjected to 10% tax. That means for someone who has a £200,000 house in the UK, £20k tax????!!!! Pension pots, investments (all of which will probably have gone down since they were invested) ... 10% of the value in tax.
> 
> Please tell me that its not true, because if it is then my next trip back to Spain will be to cancel my residency and move back here!


 I can't see you having to pay 10% on the value of your assets. First of all, there is the double taxation treaty in place and secondly regardless of your assets you will surely only pay tax on the annual increase in value. Therefore, if you have a house worth £200,000 and rent it out then clearly that's taxable income. If the value of the house increases to let's say £250,000 then I guess I could see a reason for tax to be paid but I cannot realistically see the Spanish authorities charging 10% tax on assets especially when many of them are not liquid assets such as property or pensions. If you have a house with £200,000 but your bank account is overdrawn then how can you be expected to pay £20,000 in tax?

I'm really not clued up on this because a) I am poor and B) all of my money is in Spain (all €3.46 worth) LOL


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## Stravinsky (Aug 12, 2007)

steve_in_spain said:


> I can't see you having to pay 10% on the value of your assets. First of all, there is the double taxation treaty in place and secondly regardless of your assets you will surely only pay tax on the annual increase in value. Therefore, if you have a house worth £200,000 and rent it out then clearly that's taxable income. If the value of the house increases to let's say £250,000 then I guess I could see a reason for tax to be paid but I cannot realistically see the Spanish authorities charging 10% tax on assets especially when many of them are not liquid assets such as property or pensions. If you have a house with £200,000 but your bank account is overdrawn then how can you be expected to pay £20,000 in tax?
> 
> I'm really not clued up on this because a) I am poor and B) all of my money is in Spain (all €3.46 worth) LOL


Well thats my feeling, but what I have read indicates that you have to declare it, and you pay tax on it. I already paid tax on the value of my house + its gone down in value. Investments the same, they have gone down because of the banking crisis

Ive emailed my Spanish accountant, because if it IS the case then I really will be forced away from Spain


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## gus-lopez (Jan 4, 2010)

No you already had to declare all worldwide income/assets , etc; You now have to declare individually all accounts held that contain more than 20k or have a value >20k , i believe. I never saw anything about any tax on them but failure to declare has a penalty of 25% ' tax ' on the value of the undeclared accounts ! + any tax that might have been payable.

Here is the full sp,I've just found it.

http://www.blevinsfranks.com/EN/news/104/976?newsCategoryPK=


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## Bfpijuan (Apr 6, 2011)

The article says 50,000. After first year increases of 20,000.


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## Stravinsky (Aug 12, 2007)

So is no one worried about what the Spanish may do in the future with this information?

Will people with property in the UK end up being taxed on their property on the assumption that they rent it out when they arent there, in the same way as non residents in Spain do with their Spanish properties?

The 10% tax thing was a mistake as someone was confusing the issue.

So do you think people are going to declare all this, and whats going to happen I wonder when they dont and are found out but have no funds to pay and just desert Spain for the UK shores

I understand the reasons why, I just dont trust the Spanish government as they seem to be striking out in all ways and once declared we just dont know what angle they might try to get some extra revenue


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## Overandout (Nov 10, 2012)

Stravinsky said:


> So is no one worried about what the Spanish may do in the future with this information?
> 
> Will people with property in the UK end up being taxed on their property on the assumption that they rent it out when they arent there, in the same way as non residents in Spain do with their Spanish properties?
> 
> ...


To be fair to the Spanish Government I think they are just tring to get what's due to them.

As an example; how many expats (tax residents in Spain) would volutarily declare an inheritance of a house in the UK to the Spanish authorities?

Not many I reckon, yet as Spanish tax payers they would be liable for the corresponding inheritance tax despite the fact that the inheritance is an immovable asset in the UK.

A declaration of all assets will help Hacienda investigate where all of this patrimonio came from and apply the relevant taxes.

It's about time Spanish residents (natives and otherwise) started owning up to their responsabilities for taxation. It has become "normal" to evade tax and it is a crime.

As an anecdote, we changed some of our electrical installation in our flat before we rented it out and my wife went to pay the electrician in their modern, high street shop. The attendant gave the amount of (lets say) 1.000€ and my wife got out her VISA card to pay. "Oh" said the attendant "we can't accept payment by card", my wife pointed out that there was a VISA sticker on the door, to which the attendant replied "yes, but if you pay by card you'll have to pay the IVA and the boss will have to do you an invoice"........... My wife had to return in the afternoon for the boss to do the invoice and pay what was really due. It is clear that this was not a common practice for them.

Until this attitude changes Spain will struggle to get out of the economic situation it has partially created for itself.


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## Overandout (Nov 10, 2012)

I've been reading up on this a bit since seeing this thread and it seems that the intention of this new law is indeed to make sure that assets abroad have been aquired with licit, declared money.

In other words, if you own a house in your home country and owned it before you became a tax resident in Spain, there is no issue. (Unless you are renting it out and not declaring the income, but that has not been criminalized by this new law, it always was tax evasion).

The problem seems to be for those, like my example in my previous post, who have acquired assets whilst being tax residents of Spain without declaring the acquisition. With the new law they can now look back as far as they like (without statutory limitation) and make you pay all the income tax undeclared for the rendimiento of the capital AND for the acquisition of the capital, along with interests and fines.

I still have one doubt which I would like to ask for people's opinion on though:

If you have an account or house in two peoples names (e.g. you and your spouse) does each person have to declare 100% of the value of the asset or is it automatically split 50% /50%.... it makes a big difference to me as all my assets are jointly owned and if the 50/50 rule applies neither one of us would have to declare anything because the proportional part of the asset would not exceed 50.000€....

Any thoughts?


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## gus-lopez (Jan 4, 2010)

Overandout said:


> I've been reading up on this a bit since seeing this thread and it seems that the intention of this new law is indeed to make sure that assets abroad have been aquired with licit, declared money.
> 
> In other words, if you own a house in your home country and owned it before you became a tax resident in Spain, there is no issue. (Unless you are renting it out and not declaring the income, but that has not been criminalized by this new law, it always was tax evasion).
> 
> ...



It is 50/50. Same as anything held in Spain in joint names.


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## Stravinsky (Aug 12, 2007)

Overandout said:


> To be fair to the Spanish Government I think they are just tring to get what's due to them.
> 
> As an example; how many expats (tax residents in Spain) would volutarily declare an inheritance of a house in the UK to the Spanish authorities?
> 
> ...



I think you misunderstand my point, and I take a slight offence at the inference that I might not own up to my tax responsibilities. Ive been doing that since the day I arrived here. My concern is that, based on past record, the Spanish start introducing new taxes to target us expats once we have laid out our assets

I dont worry about tax on income, because we make naff all in interest on bank accounts and investments are worth less than they were years ago


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## NickZ (Jun 26, 2009)

Spain brought back the wealth tax two (last?) years ago. 

So if you're worried they'll bring in new taxes it's already happened.

The other thing is if they really wanted this info they could request it from the UK. All the EU countries have data sharing.


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## gus-lopez (Jan 4, 2010)

NickZ said:


> Spain brought back the wealth tax two (last?) years ago.
> 
> So if you're worried they'll bring in new taxes it's already happened.
> 
> The other thing is if they really wanted this info they could request it from the UK. All the EU countries have data sharing.


& you think the UK has any idea of what everyone does ? I don't think so, some maybe.

I had the misfortune to have to contact them some months back. I haven't paid any tax in the Uk or had any reason to contact them for nearly 10 years. Even though i had NI numbers, old tax numbers ,ran a business for 18 years, etc; they had no idea who I was . It took 3 phone calls ( because the security questions ? they asked kept throwing me out ) & 1,1/2 hrs before they were actually able to find some shred of me existing ! The wife was just as bad.

Back to topic; Yes I can see where Strav is coming from. At present it is a bit based on honesty but what they are proposing to introduce is tantamount to robbery. Even if you inadvertently miss declaring something the penalties are onerous. 5k per item for failure to declare, bit steep but fair enough . What isn't is the MINIMUM of a 10k fine. That's just taking the piss. If it happened to me they'd have to add assault & battery at a minimum to it !!

The law will apply in most cases mainly to foreigners , as they are the ones who would be likely to have property, life insurance, etc; in their original countries & to a few wealthy Spaniards .The rest would be the ones hiding illicit money.

I do wonder at who comes up with these ideas. Why is the value over 50k when if you reduce it to more accounts , all below 50k, then there's no requirement to declare ? Why can you add up to 20k per year ( & I would assume that is for each account ) without having to tell them ?


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## Overandout (Nov 10, 2012)

Stravinsky said:


> I think you misunderstand my point, and I take a slight offence at the inference that I might not own up to my tax responsibilities. Ive been doing that since the day I arrived here. My concern is that, based on past record, the Spanish start introducing new taxes to target us expats once we have laid out our assets
> 
> I dont worry about tax on income, because we make naff all in interest on bank accounts and investments are worth less than they were years ago


I don't follow why you have taken even a slight offence at my post.

You asked if people were worried about the motives for the new law and I tried to explain what I see as the motives by asking you and all other readers a question which I have no problem in repeating:

How many expats do you really think are declaring ALL of their tax liabilities?

This question DOES NOT incriminate any one individual. The fact that I went on to say that many people are routinely evading paying what is due in taxes is a simple fact, the example about the IVA is real, and you and I know that it happens every day.

And why you would think that this is a law targeting expats is verging on a complex.

The law is clearly aimed at the more wealthy Spanish national who has bought property or investments outside of Spain (and outside of the EU) in order to launder illicitly gained or non-declared income.

I actually based my example of an inheritance on a real example; a person I know did inherit a property in the UK whilst residing in Spain, it was not subject to inheritance tax in the UK but should have been declared in Spain. When I explained this to him his answer was along the line of "well they can f*** off, if I don't have to pay the tax on it in the UK, why should I pay in Spain?". My reasoning that he had chosen to live in Spain and adopt its laws and regulations didn't sway his opinion.

If he was still living here he would now have a big problem because the authorities could go after the inheritance tax that he evaded all those years ago based on the information that he would now be obliged to declare, the fact that he was an expat at the time is irrelevant.

I stand by my comments, questions and examples, and whilst I'm sorry if you feel offended by the reality of my post or feel singled out by the Spanish authorities attempts to better regulate their rights to recupe missed taxes, this is the real world and I thought that this forum was a place where reality was discussed openly.

If I am wrong, please let me know and I will refrain from adding any more comments to this forum.


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## CapnBilly (Jun 7, 2011)

gus-lopez said:


> I do wonder at who comes up with these ideas. Why is the value over 50k when if you reduce it to more accounts , all below 50k, then there's no requirement to declare ? Why can you add up to 20k per year ( & I would assume that is for each account ) without having to tell them ?


My understanding is that if all your accounts total over €50k then you have to declare, so 1 @ €55k, or [email protected]€11k, and the €20k is also the total.


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## NickZ (Jun 26, 2009)

gus-lopez said:


> & you think the UK has any idea of what everyone does ? I don't think so, some maybe.
> 
> I had the misfortune to have to contact them some months back. I haven't paid any tax in the Uk or had any reason to contact them for nearly 10 years. Even though i had NI numbers, old tax numbers ,ran a business for 18 years, etc; they had no idea who I was . It took 3 phone calls ( because the security questions ? they asked kept throwing me out ) & 1,1/2 hrs before they were actually able to find some shred of me existing ! The wife was just as bad.


Don't confuse the people that answer the phones with the people that answer official requests. 

But even if the same people were involved for you wasting 90 minutes on the phone is a pain. For the person in the Spanish tax office it's work.


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## snikpoh (Nov 19, 2007)

CapnBilly said:


> My understanding is that if all your accounts total over €50k then you have to declare, so 1 @ €55k, or [email protected]€11k, and the €20k is also the total.


No, I think that you'll find it's individual assets each being over 50k euros.

I also presume that if it's a joint account then one can double that figure.


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## CapnBilly (Jun 7, 2011)

snikpoh said:


> No, I think that you'll find it's individual assets each being over 50k euros.
> 
> I also presume that if it's a joint account then one can double that figure.


Well, I might be wrong, but i thought the individual asset limits of €50k, relate to the three assets classes (deposits etc, property and investments (shares, insurance etc), and then if the total of these individual assets exceed €50k (hence 5 deposits of €11k), so they are reportable.


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## Overandout (Nov 10, 2012)

If the total of any one of the three categories exceeds 50k€ then you must declare.

E.g.:

If I have two bank accounts, one with 30k€ and another with 21k€, then I must declare them both regardless of what the property or other investments might be worth.

If I have 49k€ in bank accounts and 49k€ in shares, then I don't have to declare anything as these are in two distinct categories.

The 20k€ only applies to changes in the value of the assets in future years. 
In other words, if this year I declare my 2 accounts totalling 51k€ by end March 2013 and gain interest on these accounts during the course of the year of 21k€ (I wish!), then next year I will have to declare the new value. 
But if at 31st Dec 2013 the acounts are worth less than the 51k€ declared for 2012 + 20k€ (i.e. 71k€) I will not have to declare them again in 2014.

Obviously the 20k€ increase only applies to the requirement to declare under Ley 7/2012, I would still have to pay tax on any amount of interest earned regardless of the amount in the declaración de la renta as I previously have done.


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## Stravinsky (Aug 12, 2007)

Overandout said:


> I don't follow why you have taken even a slight offence at my post.
> 
> You asked if people were worried about the motives for the new law and I tried to explain what I see as the motives by asking you and all other readers a question which I have no problem in repeating:
> 
> ...


You quoted me when you made the comment, and as such I would normally assume you were referring to me. I wasnt offended by the reality, nor was I feeling singled out.

No I dont think its verging on a complex, as I'm not really sure what you mean 

I would disagree that its aimed at wealthy Spaniards ... this will effect any expat that owns a home in the UK, has a life insurance, a pension pot, or an amount of savings that they are drawing on, on a month to month basis. How these things are all interpreted will be interesting to say the least. Someone drawing down, say, £200 a month from an investment that has shrunk in capital due to the crisis. Will it be treated fairly, or will it be treated as income when in fact there has actually been no gain


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## snikpoh (Nov 19, 2007)

Stravinsky said:


> You quoted me when you made the comment, and as such I would normally assume you were referring to me. I wasnt offended by the reality, nor was I feeling singled out.
> 
> No I dont think its verging on a complex, as I'm not really sure what you mean
> 
> I would disagree that its aimed at wealthy Spaniards ... this will effect any expat that owns a home in the UK, has a life insurance, a pension pot, or an amount of savings that they are drawing on, on a month to month basis. How these things are all interpreted will be interesting to say the least. Someone drawing down, say, £200 a month from an investment that has shrunk in capital due to the crisis. Will it be treated fairly, or will it be treated as income when in fact there has actually been no gain


This is why one should have a savings portfolio in a 'Spanish wrapper', then there is no tax to pay on any gain unless you draw against that gain. Similarly, if there is no gain and you simply draw against the capital, then there is no tax to pay.


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## Overandout (Nov 10, 2012)

I still can't really see what the problem is to be honest.

Any expat who owned his/her house before moving to Spain is totally unaffected by this. There is no tax for owning a property abroad created by this law.

If the house is rented out then a benefit is being made and that should be declared, as was always the case.

Likewise, if your savings in a UK account are making interest, you declare the interest as income, as before, now you may have to explian where the capital came from, but so what?

Perhaps I'm over simplifying it, but to me, anyone with nothing to hide just tells the truth and is no worse off.


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## Stravinsky (Aug 12, 2007)

Overandout said:


> I still can't really see what the problem is to be honest.
> 
> Any expat who owned his/her house before moving to Spain is totally unaffected by this. There is no tax for owning a property abroad created by this law.
> 
> ...


How long have you lived in Spain and experienced the tax regime, just out of interest?


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## NickZ (Jun 26, 2009)

Stravinsky said:


> I would disagree that its aimed at wealthy Spaniards ... this will effect any expat that owns a home in the UK, has a life insurance, a pension pot, or an amount of savings that they are drawing on, on a month to month basis.


The reporting law just deals with reporting. If any of those things were taxed they are taxed even if you don't have to report them.


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## ezza (Apr 13, 2009)

Overandout said:


> To be fair to the Spanish Government I think they are just tring to get what's due to them.
> 
> As an example; how many expats (tax residents in Spain) would volutarily declare an inheritance of a house in the UK to the Spanish authorities?
> 
> ...



We had a similar experience at the Notary we had a passport copy certified for a charge of 12€ when I asked for a receipt they said that if I had a receipt I would have to pay IVA on the 12€. If the Notaries of Spain are on the fiddle where does it end!


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## gus-lopez (Jan 4, 2010)

NickZ said:


> The reporting law just deals with reporting. If any of those things were taxed they are taxed even if you don't have to report them.


Yes but if you were paying tax on them all along there was no requirement to explain where it came from. Now you have to report all of these accounts, pensions. life policies, house , etc; with an individual value of >50k even if there is no tax payable& failure brings a fine of 5k per missed declaration with a minimum of 10k fine. That is what is onerous , tantamount to legalised robbery. 
Fortunately it is not going to affect me as A) I have never agreed with unearned income so don't have interest paying accounts & b) any accounts are never in excess of 50k C) I don't have any private pension funds. d) I fortunately don't own any other property.

P.S. How many people report their premium bond wins ? They're taxable here. I know a few people who have maximum holdings & basically win every month. When pointed out that it is taxable , as are all prizes won outside Spain , ( Now all won inside Spain are taxable as well !! ) they look at you as if you are mentally unbalanced & the second word is off 1 :lol:


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## Overandout (Nov 10, 2012)

Stravinsky said:


> How long have you lived in Spain and experienced the tax regime, just out of interest?


Since 2004.


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## Stravinsky (Aug 12, 2007)

Overandout said:


> Since 2004.


Then hopefully you will have an understanding of the ramifications of declaring income that is not taxable to a government that is desperate.

I think you have misunderstood my motive for starting this thread ... maybe thats my fault, I dont know.

Its not the declaration of currently taxable income that worries me. I'll try and explain. I have a property in the UK. It generates no income. Due to the property "crisis" it's worth less than I paid for it. It is not a taxable asset .... under present laws in Spain. Will it become so when they have the information? Doubtful, I know ... but who knows, the way things are these days

Thanks Gus, good points .... maybe I'm the only one in here a position that could be affected

I'll do what is necessary when it's necessary, but it doesn't necessarily mean that I have to feel comfortable with it.


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## Overandout (Nov 10, 2012)

Stravinsky said:


> Then hopefully you will have an understanding of the ramifications of declaring income that is not taxable to a government that is desperate.
> 
> I think you have misunderstood my motive for starting this thread ... maybe thats my fault, I dont know.
> 
> ...


OK I think I now understand (sorry if I've been a bit slow.....) that you are worried about the future ramifiacations of the declaration which today won't create any additional tax burden, correct? But I really must clear up one thing which some others seem to heve misinterpreted:

Law 7/2012 does not actually create any additional tax burden. It is designed to oblige people to declare assets so that the goverment can trace the source of the capital used to acquire the capital in case that source was illicit or undeclared at the time.

I am in favour of all the anti-corruption and tax evadance laws, even if the penalties for non-compliance are harsh.

My case, just for the record is that I would be affected if the 50/50 rule doesn't apply (my assets are all jointly owned with my wife). I will take professional advice and will not declare unless necessary.

I'll let you all know the advice I receives as and when.


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## Stravinsky (Aug 12, 2007)

Overandout said:


> OK I think I now understand (sorry if I've been a bit slow.....) that you are worried about the future ramifiacations of the declaration which today won't create any additional tax burden, correct? But I really must clear up one thing which some others seem to heve misinterpreted:
> 
> Law 7/2012 does not actually create any additional tax burden. It is designed to oblige people to declare assets so that the goverment can trace the source of the capital used to acquire the capital in case that source was illicit or undeclared at the time.
> 
> ...


Yes, you hit the nail on the head.  I agree also, its not a tax law, just reporting. My issue has always been what they might do with the information once supplied.

I can quote my tax gestor here, as I'm sure he wont mind

"It is taken individually, so it is 50.000 euros each, as well when you withdraw Money on a loss you do not declare any profit, and that loss can be compensated with future profits."


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## gus-lopez (Jan 4, 2010)

What you also have to take into account is that at present the Hacienda have no idea of where the income that you declare comes from. Regardless that many foreigners provide details , statements, etc; to their gestorias , there is no requirement for them , nor any process , to forward them to the Hacienda. They are either filed or filed in the bin. 

Anyone who has a pension pot from the UK on which they pay tax in the UK & then declare here , & possibly pay some more, has not complied with the new law as the Hacienda has no idea where the income comes from. Under this law you now have to actually declare the pension pot.

Therefore anyone who thinks that by declaring, & possibly paying tax to the Hacienda , that they are complying with this law has a shock coming . 

What fascinates me is that if the account has 50k in & you declare it , then the following year you can put in less than 20k & not have to declare & you could continue to do this forever ?


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## 90199 (Mar 21, 2010)

I was originally advised to spread my investment to lessen the risk. Seems like the advice was sound and is still so. I do not have one single pot with 50 thousand in it.


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## NickZ (Jun 26, 2009)

What's the threshold for the wealth tax? €700K At current exchange rates around £560K. Isn't that a cold water flat in London?


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## Stravinsky (Aug 12, 2007)

Hepa said:


> I was originally advised to spread my investment to lessen the risk. Seems like the advice was sound and is still so. I do not have one single pot with 50 thousand in it.


Im still not sure thats the case, and have asked for clarification as the word "individual" is a bit ambiguous, as some of our investments are in my wifes name, some in mine


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## CapnBilly (Jun 7, 2011)

Stravinsky said:


> Im still not sure thats the case, and have asked for clarification as the word "individual" is a bit ambiguous, as some of our investments are in my wifes name, some in mine


I think this is an excellent point, and is the one thing that is confusing me. In the UK we are quite used to moving money between partners, as there are no tax issues. We have some accounts which are in my wife's name, but the funds came from our joint account, and will go back into the joint account when they mature. So, although they are in separate names, we would consider all our investments as under joint ownership, irrespective of whose name they are in


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## gus-lopez (Jan 4, 2010)

CapnBilly said:


> I think this is an excellent point, and is the one thing that is confusing me. In the UK we are quite used to moving money between partners, as there are no tax issues. We have some accounts which are in my wife's name, but the funds came from our joint account, and will go back into the joint account when they mature. So, although they are in separate names, we would consider all our investments as under joint ownership, irrespective of whose name they are in


You might but even the UK taxman wouldn't . If it is in one name it cannot be a joint investment & if over the value of 50k needs declaring. 

A 'joint investment' means exactly what it says, anywhere. More than one named contributor/beneficiary.


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## CapnBilly (Jun 7, 2011)

gus-lopez said:


> You might but even the UK taxman wouldn't . If it is in one name it cannot be a joint investment & if over the value of 50k needs declaring.
> 
> A 'joint investment' means exactly what it says, anywhere. More than one named contributor/beneficiary.


Whilst I agree regarding the UK taxman and the income, because of the way you declare you can transfer capital between partners with no problems. So we always tried to keep income generating assets in my wife's name, because we could then use her allowance, whilst mine was used up with pension income etc. The reason I think it's confusing in Spain is that you can declare jointly (if its beneficial), which you can't in the UK.


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## Stravinsky (Aug 12, 2007)

OK, although my contact is waiting for clarification, as he understands it at the moment:

I gave him an example of a €100,000 property, a €20k bank account and a €200 bank account and he said

"The 50.000€ limit belongs to accounts, (securities, shares and insurances) and real estate independently. So in your example you will only declare the house."


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