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Fiduciary Wealth

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http://www.fiduciarywealth.eu/

Fiduciary Wealth

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The Spanish Tax Office is desperately trying to increase its tax revenues. In 2012 Hacienda ran a tax amnesty which wasn’t particularly successful and then announced a separate initiative requiring offshore assets to be disclosed by way of an annual return-the now infamous Modelo 720. Whilst the sanctions for not completing or providing incorrect information were significant, in some cases this could be more than the value of the asset itself, it is thought that less than 5% of those required to complete actually did so.

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You could be forgiven for thinking the problem has gone away and the authorities are giving up trying to cajole people into declaring their asset base and paying the correct amount of tax due. Not so Hacienda has now decided to go on a recruitment drive and employ several thousand additional tax inspectors to specifically target different nationalities, British being their first priority. So if you didn’t complete Modelo 720 now might be a good time to come up with a good excuse or else expect some nasty interaction with the authorities over the coming months.

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Of course one of the tried and tested arguments is the “I am not Spanish resident” option despite spending more than 183 in Spain and triggering automatic residency status with the requirement to complete a tax return. People should realise how easy it is for the tax office to track length of stays in a particular country.Hacienda has already engaged with the major utility companies, electric and phone to obtain records to establish patterns of residency and the Guardia Civil have been asked to check up on all foreign registered cars (often using road blocks) to identify those outstaying their welcome. Fall foul of this rule and you can trigger a nasty investigation, we have seen the letters issued by Hacienda and the consequences on unsuspecting expats who have spent too long in Spain without declaring their residency.

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There is another area where Hacienda has begun to bite. Spain was very quick to sign up to an agreement “FATCA” between major European countries, UK, France, Germany and Italy included which provides automatic exchange of information. According to our source the UK and Spain constantly exchange information about individuals where there is a suspicion that tax is not being paid in the right jurisdiction. One stray bank statement sent to an address in another country and automatically copied to the tax authority can lead to no end of problems.

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Hacienda really has got its act together and is rigorously pursuing those with undeclared assets and those who spend more than 183 days in Spain. Of course it is impossible to rectify past mistakes and make retrospective amendmentsto your residential status or where you hold your assets. What we can do however is help you make the right decisions moving forward and help you put your affairs in order.

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If this is a course of action you would like to take please contact a certified financial planner on Tel: 956796911 or email [email protected] for financial advice on your tax planning and financial planning needs. Visit http://www.fiduciarywealth.eu.


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