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ASSETS OUTSIDE OF SPAIN CAN MEAN PAIN

Fiduciary Wealth Team

Have you read about the new tax law which can apply to all Spanish tax residents? Do you think that you can ignore it or that it doesn’t affect you? Unfortunately the reality is that if you have undisclosed assets outside of Spain, even if these are within a trust or an offshore company  then  you will need to declare them and be prepared to suffer tax penalties if you haven’t been disclosing income or gains you have receiving.

All across Europe and beyond tax authorities are closing in on expatriates holding investments in another jurisdiction or within an offshore company or trust and who are not declaring income and gains. Whether, for example, you have money invested in Jersey, assets within a Maltese trust, or have set up an offshore company in the hope of avoiding paying tax you are now facing the reality of having to disclose those assets and settle any past tax liability and pay taxes due moving forward.

You might think that your existing advisers will sort this out for you but let me ask you the question? Who advised you to take this action in the first place? What advice are your existing advisers giving you now? We have been telling clients for some time now that it would only be a matter of time before loopholes were closed and that a change in the EU Savings Directive would give authorities the power to look through companies and trusts. Well Spain has jumped the gun and taken unilateral action following on from the less than successful tax amnesty that was available for use towards the end of 2012.

Perhaps you think that it will all blow over and you can bury your head in the sand? Well think again because the penalties for non -reporting or mis- reporting are severe.  Maybe you consider it to be too much hassle to do anything when at the same time there are completely legitimate tax efficient solutions for expatriates resident in Spain. Why pay unnecessary tax on savings and investments when if structured properly they can be held in a way that minimises your tax liability moving forward. Why didn’t your existing advisers tell you that?

Finally you may think that you have escaped the net by not being Spanish tax resident. You live here but are not fiscal resident and rightly think that this new law does not apply to you. How long do you think you will be able to get away with this? Have you not heard that the Spanish authorities are getting their act together and checking electricity and phone records to establish patterns of residency?  Wouldn’t it make sense to avert any future risk by recognizing that you cannot spend more than 183 days here without declaring residency? Do you really think that anyone will care if expatriates are targeted for unpaid taxes?  

Why not let us help you straighten out your affairs and make sure that you are not risking financial loss? Telephone 956 796 911 or email wealth@fiduciarywealth.eu