In 2012 the Spanish government passed legislation that required any foreign person resident in Spain to declare assets held abroad totalling in excess of €50,000 euros or £44,000 pounds.
The legislation was brought in by Royal Decree Law 1558/2012 and published in the Official State Bulletin BOE-A-2012-14452 on the 24th of November 2012 to prevent tax evasion, carrying heavy penalties with a minimum fine of €10,000 euros if the Modelo 720 (Declaración informativa sobre bienes y derechos situados en el extranjero) was not completed, or submitted incorrectly.
Residents were initially required to make the declaration about their assets (with total value over £44,000) owned outside of Spain at any time during the year 2012 including bank accounts, property, shares, insurance policies etc during 2013, even if they had been disposed of, or transferred before the 31st December 2012.
The first asset declaration had be presented between the1st of February and 30th April 2013. Foreign residents in Spain need only present a subsequent one between the 1st of January and 31st of March, if their assets abroad increase by more than €20,000 euros £17,000 pounds in the year, in relation to their former declaration.
There are many British people who spend time living in both the UK and Spain, your tax residency is defined by the country where you spend more than 183 days of the year. You should pay your taxes in that country for your worldwide income and capital gains, and elsewhere you pay taxes only for income and gains obtained in that country.
If you are considering relocating to live in Lanzarote or Spain, we suggest you seek expert financial tax advice first, particularly if your assets exceed £44,000, as this asset declaration is now required as part of the residency application.
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