Gains arising on shares in Spanish-owned companies must be
reported in Spain
Monday 20 October
What do you need to consider, in addition to your
UK reporting requirements, when disposing of shares in a Spanish
company?
Why would you need to worry about Spanish reporting
requirements on your share disposals?
A growing number of individuals now own shares in Spanish
companies, having either acquired them directly or as a result of a
merger or acquisition. For example, the Spanish company Santander
now owns Abbey National Plc and Scottish Power is owned by
Iberdrola. This trend is likely to continue for shareholders
in Alliance & Leicester, and potentially Bradford & Bingley
if, following the recent events in the financial markets, the
purchase of these companies is finalised by the Santander
Group.
However, it is important to note that the shareholders of
Spanish companies have to comply with certain Spanish filing
requirements, even when the shareholder is not resident in Spain
for tax purposes.
What should you do if you are affected?
Where a gain is realised on the disposal of Spanish shares by
way of gift or sale, the seller is required to confirm the gain by
filing a tax return form 210, together with a certificate of UK tax
residence, with the Spanish tax authorities. There is no filing
requirement if the shares are disposed of at a loss.
The certificate of UK residence can be obtained (usually in
writing) from HM Revenue & Customs.
The completed form 210 and certificate of UK tax residence must
be delivered in person to the Spanish tax authorities, generally in
Madrid. This means that shareholders will normally have to
engage the services of a Spanish tax representative in order to
have the documents filed.
Our Grant Thornton member firm, Audihispana Grant Thornton in
Madrid will be able to assist with these reporting
requirements.
What happens if the filing deadline is not
met?
Form 210 must be filed within 30 calendar days of the date of
the sale or gift. The failure to file the form will give rise to a
penalty of approximately €100, even if there is no tax to pay. This
penalty may increase to approximately €200 if the form is not filed
before the Spanish tax authorities have raised a demand.
Eric Williams, Head of Private Client at Grant Thornton says:
"Company share dealing services may offer assistance in complying
with these formalities under certain circumstances, but this may
not always be the case. Therefore, individuals need to be aware of
their reporting obligations if unforeseen penalties are to be
avoided. "
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would like further advice on any of the above.