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News / Protect your wealth from tax in Cataluña

Protect your wealth from tax in Cataluña

05.05.17
Sagrada Familia, Cataluna, Barcelona

Please note that this article is over six months old. While Blevins Franks takes care to make sure that information is accurate on the date of publication, some content may change over time. You should not rely on the accuracy of legislation and tax information in this article; take professional advice for your circumstances.

Reduce your tax bills. Know your income tax, capital gains tax, wealth tax and succession tax liabilities in Catalonia, Barcelona, Girona and Lleida.

If you are resident in Spain, or planning to move to Spain, you are liable for Spanish taxes on your worldwide income, gains and wealth, and also subject to the succession and gift tax rules on inheritances and lifetime gifts. Rates and allowances vary from region to region, so if you live in Barcelona, Girona, or Lleida provinces you need to be familiar with the local rules for the Cataluña region.

Income tax. How much do I have to pay?

Savings income – interest income, dividends, capital gains, income from life assurance contracts and income from purchased annuities is taxed progressively at 19%, 21% and 23% for 2017.

General income – All other income (including employment, pension and rental income) is taxed at scale rates of income tax. Each Autonomous Community can vary the regional portion and in Cataluña the rates currently range from 21.5% to 48%.

Download our Guide to Taxes in Spain

How are capital gains taxed in Spain?

Capital gains made on both property and investments are taxed as savings income at progressive rates of 19%, 21% and 23%.

You do not need to pay capital gains tax when selling your main home provided you either reinvest the money onto another main home or you are over 65 years old (and meet certain conditions).

Do I have to pay wealth tax?

If you are resident in Spain you may have to pay this annual tax, depending on the value of your worldwide assets as at 31st December. In Cataluña the annual general allowance is €500,000 in 2017 plus up to €300,000 against the value of the main home. Regional tax rates range from 0.21% to 2.75%.

Any questions? Ask our local adviser for help here

Spanish succession tax. How much will my heirs pay?

If you leave heirs assets that are located in Spain, they will each have to pay succession and gift tax on the amount they receive. Spouses are generally not exempt. Also, if you are resident in Spain and receive an inheritance you will be liable for succession tax on it.

In Cataluña the succession tax rates can range up to 32% and in some cases multipliers can take it to twice that. Allowances in this region are quite generous, for example there is a 99% relief for spouses (different reliefs applicable for children) and additionally spouses and children get €100,000 tax free as a relative’s reduction. There is also a 95% reduction against the value of the main home, if certain conditions are met.

Modelo 720. What do I need to do?

If you are resident in Spain you have to declare your overseas assets worth over €50,000 on Modelo 720. Significant penalties may be imposed for failure to report. Although it is not a tax return as such it can have tax implications, so you do need to take professional advice when completing this form.

Download the Blevins Franks Guide to Taxes in Spain

Blevins Franks provides integrated advice on:

We have in-depth knowledge of Spanish and UK taxation and the interaction between them. We specialise in reducing tax on invested capital, pensions, wealth and inheritance, and have saved our clients a substantial amount of tax over the years.

Tax rates, scope and reliefs may change. Any statements concerning taxation are based upon our understanding of current taxation laws and practices which are subject to change. Tax information has been summarised; an individual is advised to seek personalised advice.

Tax rates, scope and reliefs may change. Any statements concerning taxation are based upon our understanding of current taxation laws and practices which are subject to change. Tax information has been summarised; individuals should seek personalised advice.
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