Author Topic: New rules on resident foreign assets reporting

Janet · « **on:** Wed 19 Dec 2012, 10:18 »

I am indebted to Blevins Franks for drawing my attention to the fact that as part of more wide-ranging anti-fraud/black economy measures (which include the ban on business cash payments over €2,500), Madrid has amended its fiscal requirements on foreigners’ assets held outside Spain. The new legislation is Ley 7/2012 of 29 October 2012, and the rules came into force straightaway.

The Hacienda (Spanish Inland Revenue) now requires residents to report any and all assets totalling more than €50,000 held outside Spain; after the first declaration, these assets will need to be declared again if they have increased by €20,000. The penalties are apparently very serious, so it is in everyone’s interest to be aware of the requirements. I’ve uploaded a pdf advice sheet from Blevins Franks, and there's a link on my site to download it, as well as one to BF’s own website. JA

poker · « **Reply #1 on:** Wed 19 Dec 2012, 11:52 »

Compartir . . . . . . to pour spain . . . .

Janet · « **Reply #2 on:** Tue 26 Feb 2013, 14:36 »

There is an updated factsheet for the legal requirements on resident foreign assets reporting. The file is large so I won't upload it here. It can be downloaded from my own website HERE, though.

Nova · « **Reply #3 on:** Tue 26 Feb 2013, 15:02 »

In the FAQ reference is made to property owned by several people, but what about property owned by a bank in the form of a mortgage? I have a property in the UK, value about £60,000, with an outstanding mortgage of about £50,000. Technically this is a liability rather than an asset, but is there any clarification as to whether it needs to be reported as a property worth over €50,000 which is partially owned by me?

Janet · « **Reply #4 on:** Tue 26 Feb 2013, 15:14 »

I think you are the owner, not the bank. The bank has a charge on it, but it's not the owner (for these purposes) ... as far as I understand it.

Nova · « **Reply #5 on:** Sun 7 Apr 2013, 20:51 »

I have found the modelo, it's the 720 and can be completed online at AEAT. I want to ask a couple of estate agents how the market is doing before I complete the declaration because right now my house could be worth anything between 40k and 70k for all I know. Assuming of course, that an estate agents' estimate is sufficient for my declaration

It all seems very silly. The value of my house is so borderline that I don't see how they could ever know or even argue it if I don't declare on the basis that an estate agent told me it's worth 49,950....

Pelinor · « **Reply #6 on:** Sun 7 Apr 2013, 20:58 »

Wouldn't you be able to discount the mortgage. After all it's not an asset it's a loan. If you have a house with a 40,000 pound mortgage and it's worth 50,000 your only asset is the 10,000 equity which will of course change every year?

Nova · « **Reply #7 on:** Sun 7 Apr 2013, 21:06 »

Not according to Janet's post third above, though that would make logical sense to me. A house with a mortgage isn't an asset, it's a liability, especially when I'm completely dependent on the rental income to cover the mortgage, which it barely covers if it even does. If the rent stops coming in I can't afford to pay rent here as well as mortgage there so I would be completely in the doo-doo. That's not an asset.

My plan is to contact an estate agent to ask the rough value, phone the mortgage company and see how much I have left to pay in the remaining 35 years of my mortgage, then phone Hacienda for advice. It seems pointless that I should have to declare it and I can't see them being in any way interested in a heavily-mortgaged, bottom-end ex-council house in Stoke, but I don't want to risk paying any fines either.

Pelinor · « **Reply #8 on:** Sun 7 Apr 2013, 21:20 »

Ah! missed that sorry.

Janet · « **Reply #9 on:** Tue 9 Apr 2013, 11:06 »

Just had confirmation on the mortgage question. The owner is the individual, not the bank, which is considered simply to have a charge on the asset. As such, logically, and now confirmed, that charge is irrelevant for these purposes.

They want the value of a mortgaged UK property in total, and consider the owner to be the individual named on the deeds. In terms of "value", I'm just getting that checked now ...

edit: the value is ... the original purchase cost. So, it seems to me that for the first year it's whatever you paid for it whenever you paid for it. The problem comes in subsequent years because a property bought a while ago might well have risen 20,000 since the value given at the point of declaration.