Spanish Shareholdings - Do you have any?
Many UK share investors will have picked up shareholdings in Spanishcompanies in recent years. The most common example is Banco Santanderwho have acquired a number of UK building societies. (Abbey National2004, the Alliance & Leicester, and more recently they have bid toacquire parts of Bradford & Bingley.)
If you hold Santander shares, dividends you receive after 5 April2008 now benefit from the same 10% notional tax credit as UK shares.For basic rate tax payers there is no real change.
But what happens if you sell your Spanish shares?
Capital Gains Tax
Many UK holders of Santander shares will have paid nothing for theshares as they were acquired when the underlying UK building societieswere demutualised many years ago. Subject to the usual rules yourdisposal may or may not create a capital gains tax liability in the UK.
What many shareholders may not realise is that they also have a legal obligation to file a tax form in Spain.
The completed Form 210 and certificate of UK tax residence must bedelivered in person to the Spanish tax authorities, generally inMadrid. This means that shareholders will normally have to engage theservices of a Spanish tax representative in order to have the documentsfiled.
Form 210 must be filed within 30 calendar days of the date of the saleor gift. The failure to file the form will give rise to a penalty ofapproximately (Euro) €100, even if there is no tax to pay. This penaltymay increase to approximately €200 if the form is not filed before theSpanish tax authorities have raised a demand.