Tax Form 720 Asset declaration

Information and questions about the Law in Spain and Andalucia.
alpujarran
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Re: Tax Form 720 Asset declaration

Postby alpujarran » Sat Feb 02, 2013 11:01 pm

CapnBilly wrote:Surely it only has an asset value if you can crystallise and draw/transfer that value, otherwise it's not worth a jot.

However, . . . technically that could be declareable.
See, it's not easy to put up a convincing argument is it :?: :)

A defined-benefit pension provider can actually give you a valuation even after your pension has started. Sometimes this is known as a cash equivalent value [no transfer being available]. They appear to be obliged to provide this valuation for divorce proceedings. And that valuation will definitely be considered as an asset available for sharing out.

Not that I'm suggesting this as a way to help with filling in the form :wink:

But it does indicate that it's worth more than a 'jot'.
CapnBilly wrote:No idea, think I'll lie down in a dark room.
Just don't fall asleep - or the nightmares might start :twisted:

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Re: Tax Form 720 Asset declaration

Postby Parilla » Sun Feb 03, 2013 7:14 am

Alpujarran, not sure you are right about being traced outside Spain through your NIE, or locating any bank accounts held. But if you are right I would appreciate more information - our community and the local courts are trying to locate a number of debtors in the UK without success, even though we have their Spanish NIE, so any help would be appreciated.

Also, I don't think the Spanish Tax office can access foreign bank accounts at will, they have no jurisdiction in the UK. The only way to process a Spanish Court judgement in the UK would be through a European Enforcement Order, and they are applicable ONLY if the claim is uncontested.

Parilla

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Re: Tax Form 720 Asset declaration

Postby Miro » Sun Feb 03, 2013 10:28 am

alpujarran wrote:Just don't fall asleep - or the nightmares might start :twisted:
I haven't slept for weeks, yet I'm already having the nightmares!

I think to be on the safe side, I'll just declare the "pot" value prior to starting the pension, as Cid suggested. It can't be worth more than that now, and I'm fairly sure Hacienda wouldn't mind a higher figure than it's true value being declared - would they?
CapnBilly wrote:most schemes pay an income (varies around 50/60%) to a surviving spouse ( not sure about partners). So my wife would receive 60%, technically that could be declareable. No idea, think I'll lie down in a dark room.
Now you've raised another issue. This defined benefits scheme does indeed pay a percentage of the pension to the surviving partner - does this mean that my partner will have to declare this as an asset, as the beneficiary? :wtf:
Don't worry about what people think, they don't do it very often

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alpujarran
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Re: Tax Form 720 Asset declaration

Postby alpujarran » Sun Feb 03, 2013 11:17 am

One way to get a valuation on your pension benefits/rights could be by using a comparison website such as
http://www.sharingpensions.co.uk/annuity_rates.htm
There are many more sites and some of the companies themselves do online quotes. You should be able to get quite specific - age, index linked, 50% for spouse etc.

I suppose that if you kept copies of your research then you could justify the value you entered to the authorities - if you were ever asked.

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Re: Tax Form 720 Asset declaration

Postby Miro » Sun Feb 03, 2013 11:59 am

Another couple of questions: how should one calculate average account balances for the last quarter 2012?
And Premium bonds - just declare the total holding, and the holder's number, or need to declare each individual bond number (could potentially be 30,000 separate numbers!)
Don't worry about what people think, they don't do it very often

"Acquiring a dog may be the only opportunity a human ever has to choose a relative," Mordecai Siegal 1935-2010.

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Wicksey
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Re: Tax Form 720 Asset declaration

Postby Wicksey » Sun Feb 03, 2013 12:50 pm

What if your assets have changed dramatically during 2012? Just as an example, if you had 51k€ in the bank then you bought a car which would leave you with well under the declarable amount by the end of the year? The average balance may not accurately reflect the situation as at 31 Dec 2012. Is there a chance to say exactly what you have on 31 Dec - if your savings are below the limit on that day do you still have to show anything in that section?

Re annuities, my OH's lump sum was well below the limit but that was transferred to an insurance company who agreed to give 5% of the amount as a pension during his lifetime. I do not receive anything from it once it has been running 5 years and there is no other payout on his death, the money stays with the insurance company. I can't imagine that the original amount paid to them has increased. It does seem odd that this has to be declared when it cannot be transferred/withdrawn/used in any other way. His annuity can be declared on his tax return so why do they need to know the sum paid into the insurance company when to my mind it no longer even belongs to us?

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Re: Tax Form 720 Asset declaration

Postby Beachcomber » Sun Feb 03, 2013 1:30 pm

I have been wondering about calculating the average balance for the last trimestre as well. UK banks do not provide this information so the only way I can see is to add up all of the balances from the statements for October, November and December then divide by the number of entries.

Regarding premium bonds, if you give the holders number they can check on the NS&I web site to see if you have won. If you give the individual premium bond numbers they can still check but it would mean trawling through all of the higher category winners to if any of your numbers match any of them.

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Re: Tax Form 720 Asset declaration

Postby El Cid » Sun Feb 03, 2013 1:38 pm

Wicksey wrote: Is there a chance to say exactly what you have on 31 Dec - if your savings are below the limit on that day do you still have to show anything in that section?

His annuity can be declared on his tax return so why do they need to know the sum paid into the insurance company when to my mind it no longer even belongs to us?
You give the balance on 31st December and the average balance during the last quarter.

I agree with you about annuities and the same applies to life insurance polices but they specifically include them.

Ours not to reason why!

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Re: Tax Form 720 Asset declaration

Postby Miro » Sun Feb 03, 2013 1:59 pm

Beachcomber wrote:I have been wondering about calculating the average balance for the last trimestre as well. UK banks do not provide this information so the only way I can see is to add up all of the balances from the statements for October, November and December then divide by the number of entries.
That's my Sunday afternoon accounted for then :(
Beachcomber wrote:Regarding premium bonds, if you give the holders number they can check on the NS&I web site to see if you have won. If you give the individual premium bond numbers they can still check but it would mean trawling through all of the higher category winners to if any of your numbers match any of them.
Like your thinking! Give the b*****s some work to do! I'm not sure if the assets have to be reported in the relevant category or not, or if everything that fits into one or other category is just listed - but which category to premium bonds fit in anyway? If they are considered the same as banks deposits, what about BIC & IBAN info? So do they come under "bonds"?
Don't worry about what people think, they don't do it very often

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Julie
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Re: Tax Form 720 Asset declaration

Postby Julie » Sun Feb 03, 2013 2:12 pm

Assuming the other house and their assets are jointly owned they will need to have a total wealth of over €1.4million.

Assuming one has assets of the above, what rate of tax would they have to pay ?
No soporto ver la casa sucia, ahora mismo me levanto y apago la luz.

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Re: Premium bonds

Postby alpujarran » Sun Feb 03, 2013 2:32 pm

Miro,
If you go the the site of the issuers at
http://www.nsandi.com/savings-premium-bonds
and check out their terms and conditions it says:
"This agreement applies to NS&I Premium Savings Bonds Series B (“Bonds”), . . . . Bonds are a UK Government security . . . ."

I realise the effort is wearing you down - but are you getting too lazy to Google right now :)

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Re: Tax Form 720 Asset declaration

Postby katy » Sun Feb 03, 2013 2:54 pm

Julie wrote:Assuming the other house and their assets are jointly owned they will need to have a total wealth of over €1.4million.

Assuming one has assets of the above, what rate of tax would they have to pay ?
I was going to ask this. It may be 20% :? Some friends on the coast knew nothing about this tax as they don't "do" internet. I am beginning to regret having told them about it. :problem: If pension pots, investments etc are included I think a lot of expats will be brought into the 1.4 million band. I would say use a gestor, problem is there are as many bad ones as good ones :( Most have no idea of international tax laws. It needs to be an Accountant specialising in overseas tax.If I had lot of money at stake I would employ one in the UK.

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Rights and entitlements

Postby alpujarran » Sun Feb 03, 2013 3:05 pm

Maybe what is throwing some people here is what is in the post title: ASSET declaration.

The Modelo 720 is about: “Declaración informativa de bienes y derechos situados en el extranjero”.

Now the word derechos has various meanings including rights and entitlements. Looking through the Spanish versions of government output there is no doubt in my mind - from the context - that they are interested in what your entitlements are worth as well as what your property or assets are worth.

To take an extreme case, it's no good putting several million euros into a trust-fund for which you are the sole beneficiary and then pleading poverty because you've nothing in the bank.

alpujarran
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Re: Spanish wealth tax

Postby alpujarran » Sun Feb 03, 2013 3:10 pm

"Wealth tax is payable by residents (on worldwide assets) and non-residents (Spanish assets) based on assets held at 31st December each year. Residents have an individual allowance of €700,000, plus a main home allowance of €300,000. Married couples may have a combined allowance of €2 million. The rates of tax range from 0.2% to 2.5%"

www.blevinsfranks.com/

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Julie
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Re: Tax Form 720 Asset declaration

Postby Julie » Sun Feb 03, 2013 3:35 pm

I am glad we only stay just under 6 months when we go over, sounds like a nightmare, I struggle with the tax here :(
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Re: Tax Form 720 Asset declaration

Postby El Cid » Sun Feb 03, 2013 4:30 pm

Julie wrote:
Assuming one has assets of the above, what rate of tax would they have to pay ?
there are 8 bands of tax from 0.2% to 2.5%.Payable on the excess above the 700k allowance

0- 167k -0.2%
167k-334k 0.3%
334k-668k 0.5%
668k -1337k 0.9%
1337k-2673k 1.3%
2673k-5347k 1.7%
5347k-10696k 21.1
the rest 2.5%

Sid

alpujarran
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Re: Tax Form 720 Asset declaration

Postby alpujarran » Sun Feb 03, 2013 5:21 pm

I'm sure you'll all be pleased to know that systems are being put in place to double-check your arithmetic. From HM Treasury

"This Model Agreement establishes a framework for reporting by financial institutions of certain financial account information to their respective tax authorities, followed by automatic exchange of such information under existing bilateral tax treaties or tax information exchange agreements.
.
.
This is an important step forward in establishing a common approach to combat tax evasion based on automatic exchange of information. France, Germany, Italy, Spain, the United Kingdom and the United States will, in close cooperation with other partner countries, the OECD and where appropriate the EU, work towards common reporting and due diligence standards to support a move to a more global system to most effectively combat tax evasion while minimising compliance burdens.
"

And all computerised, searchable and cross-referenceable no doubt.

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Re: Tax Form 720 Asset declaration

Postby El Cid » Sun Feb 03, 2013 5:40 pm

alpujarran wrote:
And all computerised, searchable and cross-referenceable no doubt.
If you have something to hide be afraid, very afraid!

Sid

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Re: Tax Form 720 Asset declaration

Postby Beachcomber » Sun Feb 03, 2013 5:50 pm

A country whose parliament and institutions are riddled with corruption and criminality and big business tax evasion has to crack down hard on minor offenders in order to convince itself that it still has standards.

http://www.bbc.co.uk/news/world-europe-21305154

I wonder if this law applies to, and will be complied with by, Spanish parliamentarians and the like?

alpujarran
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Re: Tax Form 720 Asset declaration

Postby alpujarran » Sun Feb 03, 2013 6:32 pm

Q: What's the capital of Spain?



A: About twelve euros


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