Page 24 - Spanish Insight - November 2019

How much wealth tax do you

have to pay in Andalucía?

a personal tax-free allowance of €700,000 For Spanish residents only, there is a rule
By Steven Langford, Partner, Blevins Franks (although this figure can vary in certain which establishes that your cumulative
Spanish Autonomous Regions). Spanish wealth and income tax liabilities cannot
residents can get an additional allowance of exceed 60% of your personal income taxable
Andalucía continues to be a favourite up to €300,000 against the value of their amount (but excluding gains on assets held
destination for expatriates, including those main home (excluding properties owned for more than one year). However, you do
making the most of their retirement years. through corporate structures). have to pay a minimum of 20% of the full
There are many benefits to living here, wealth tax calculation originally calculated.
and with the wide variety of property Therefore, a married couple living here This depends on how you hold your wealth,
and locations, there is a dream home for and owning property in joint names could and if you can control the amount of your
everyone. potentially have a total tax-free allowance taxable income your investments generate
of €2 million for wealth tax purposes. That on annual basis - there are some tax-efficient
Taxation can however spoil the dream for said, wealth tax is an individual tax in Spain investments that will allow you to reduce
some, particularly wealthier individuals and so they have to submit separate wealth tax both your income and wealth tax liabilities
families. returns. in Spain. Note that your wealth tax liability
cannot be reduced at all on assets that do not
Besides the expected income and capital gains The Autonomous Regions can vary wealth tax produce any income (i.e. jewellery, cars, etc.).
taxes, Spain additionally imposes an annual rates and allowances. The allowances above
wealth tax. While most people are exempt are those applied under the state rules, which Tax planning
– in general, if you are resident in Spain, also apply in the Andalucía. Other regions If wealth tax or other Spanish taxes
you can only be affected if the net value of may have different limits. concern you, ask a specialist tax and wealth
your worldwide assets is over €1,000,000 – management adviser to review your current
it can have a significant impact on wealthy Madrid currently provides a 100% tax-free tax planning and the way you own assets
individuals. We know there are people who relief, so that its residents do not have to pay to see if you can use Spanish tax compliant
would love to live in Spain but feel that any wealth tax, regardless of their total net arrangements to lower your tax liabilities.
wealth tax will have too big an impact. worth, although they may need to submit With careful planning you could structure
a wealth tax return only for information your investments to provide a number of
However, with specialist advice and careful purposes. It is the only region to do this advantages.
planning they may be able to achieve though.
their dream of living here – you can often Here in Andalucía, progressive rates start at Expert financial advice tailored for your
legitimately minimise your overall tax 0.24% on assets up to €167,129 and rise up personal circumstances can help you make
liability in Spain, particularly on your to 3.03% on assets over €10,695,996. the most of living in Andalucía. A cross-
investment capital. border firm could also recommend tax-
Exclusions and limits to wealth tax efficient opportunities in other countries,
Are you liable for wealth tax? Wealth tax is not payable on general such as the UK, if you decide it is time to set
If you are resident in Spain, wealth tax household contents (other than items like your sights elsewhere or even return home.
applies to your worldwide assets, after tax- art and vehicles), pension rights (other than
free allowances (see below). For non-residents purchased annuities), certain shareholdings The tax rates, scope and reliefs may change.
it affects Spanish assets only. It is payable on in family companies and business assets Any statements concerning taxation are based
the total net value of your taxable assets at (subject to conditions). There can be some upon our understanding of current taxation
the end of each year (i.e. 31st December). exemptions for antiques and works of art, but laws and practices which are subject to change.
you need to follow specific rules. Tax information has been summarised; an
The tax is payable on the net value of most of individual is advised to seek personalised
your capital assets, such as real estate, savings When calculating net taxable wealth, loans advice.
and investments, shareholdings, jewellery, are deductible provided they were not used
art, antiques, cars, boats, etc. to buy or invest in assets exempt from wealth Keep up to date on the financial issues that
tax, but in some cases certain conditions may affect you on the Blevins Franks news
Wealth tax rates and allowances must be met. page at www.blevinsfranks.com
Each individual, resident or otherwise, has

24 Spanish Insight November 2019