Santander sale of rights uk tax treatment

Reporting your foreign income

You usually need to fill in a Self Assessment tax return if you’re a UK resident with foreign income or capital gains. But there’s some foreign income that’s taxed differently.

You do not need to fill in a tax return if all the following apply:

• your only foreign income is dividends
• your total dividends - including UK dividends - are less than the £2,000 dividend allowance
• you have no other income to report

Different rules may apply if your permanent home (‘domicile’) is abroad.

Register for Self Assessment

If you do not usually send a tax return, you need to register by 5 October following the tax year you had the income.

You’ll get a letter telling you what to do next after you’ve registered.

Register now

Filling in your tax return

Use the ‘foreign’ section of the tax return to record your overseas income or gains.

Include income that’s already been taxed abroad to get Foreign Tax Credit Relief, if you’re eligible.

HM Revenue and Customs (HMRC) has guidance on how to report your foreign income or gains in your tax return in ‘Foreign notes’.

Spanish Shares

If you profit from the sale of Spanish shares such as IAG (ex-BA), Iberdrola, Santander (ex-Abbey or ex-A&L) or other benefits from a holding (such as rights or fractional entitlements to rights) you may need to submit a return to the Spanish tax authorities. We can do this for you.

Please note that, as a result of a double tax treaty between UK and Spain there will be no tax to pay to Spain for UK taxpayers.

I’ve sold my Banco Santander shares. Do I need to complete the form?

Yes, if you've sold them at a profit.

Spanish law requires any non-resident of Spain, who profits from the sale of Spanish shares, to declare this to the Spanish tax authorities. This also applies to executors and other legal representatives of the shareholder. Reporting is done using Spanish tax form 210 ("modelo" 210). If you are a UK resident there will be no tax to pay to the Spanish authorities.

The 210 form is only available in Spanish and has to be physically delivered to the authorities in Madrid. If you try to do all this yourself the whole process is complicated, time consuming and expensive.

However, working closely with our colleagues in Spain, we can take care of it for you. Just spend two minutes completing our order form and we’ll take it from there. [top]

My Santander rights/fractional entitlements have been sold on the market. Do I need to complete a form?

Under the arrangement introduced by Santander from November 2009 it is possible that you will have rights to shares sold on the market (Santander's option "2") or your fractional entitlement to rights sold on the market (under option "3".)  Technically speaking, we understand that this gives rise to a reporting requirement and, under Spanish law, you should submit a 210 form.  We can take care of this for you although, in many cases, it will be uneconomic because our charge (£29.50) may be higher than your gain. 

If you need to submit a 210 form for this situation, please contact us and we'll tell you the information we need. 

If you decide to sell the shares in the near future we can combine this reporting requirement with that of the share sale so you will only need one form.  In these circumstances please complete our order form when you receive you contract note after selling the shares.  [top]

What if I sell my shares at a loss?

If you sell you shares at a loss no gain is realized and there is therefore no need to complete a form. However, unless you bought your Spanish shares in the market, you should bear in mind that the relevant acquisition price for determining whether a gain has been made will be the value attributed to the share at the date of takeover. The average price of your shares may have been reduced if the 2009 rights issue was taken up. For ex-Abbey National shares the acquisition price is €7.58 (note - euros) with the rights or €8.44 without. So, at current exchange rates, if these shares are sold now for more than £6.60 (or £7.40 without rights), a 210 form will be required.

The notional acquisition price for ex-Alliance and Leicester shares was €9.81 (with rights) or €11.23 (without) so, at current exchange rates, if these shares are sold now for more than £8.60 or £9.80 or so a 210 form will be required.

If you are unsure please feel free to contact us. [top]

What happens if I just do nothing?

According to Spanish law you could be liable for a fine of €100 rising to €200. [top]

Couldn’t I just do it myself?

You can, but it’s certain to be more time consuming and more expensive than getting us to do it. It will cost you more to present the form than it would for us to do the whole job for you. After all, it’s precisely because it is so complicated and costly to do it yourself that we’ve introduced our simple, value-for-money service.

But, if you still want to have a go, here’s what you would need to do:

1. Obtain a Form 210 which can be downloaded from the website of the Spanish tax authorities. Unless you speak Spanish, you will need to refer closely to notes of guidance in English. These can be downloaded from the shareholders' area of the UK websites of Iberdrola or Santander as appropriate.
2. After completing the 210 form you will then need to contact HMRC to obtain a UK certificate of residence.
3. You will then need to physically deliver both documents to the Spanish Tax authorities in Madrid either in person or via an authorized agent in Spain who you will need to appoint and pay (probably in euros) for this service.

Alternatively:

We can take care of it for you. We'll complete the form, present it to the authorities in Spain and send you confirmation; we'll then guide you through the process of obtaining a certificate of residence. And, because we’ve negotiated special arrangements with our agents in Spain, we guarantee we can do it cheaper than if you do it yourself! Just spend two minutes completing our order form and we’ll take it from there. [top]

I’ve sold Spanish shares as the executor/legal representative of the shareholder. Do I need to complete the form?

Yes, if they were sold at a profit. Even if you are the executor of a deceased shareholder or have power of attorney, you will still need to complete a 210 form on behalf of the shareholder.

Spanish law requires any non-resident of Spain, who profits from the sale of Spanish shares, to declare this to the Spanish tax authorities. This also applies to executors and other legal representatives of the shareholder. Reporting is done using Spanish tax form 210 ("modelo" 210). If you are a UK resident there will be no tax to pay to the Spanish authorities.

The 210 form is only available in Spanish and has to be physically delivered to the authorities in Madrid. If you try to do all this yourself the whole process is complicated, time consuming and expensive.

However, working closely with our colleagues in Spain, we can take care of it for you. Just spend two minutes completing our order form and we’ll take it from there. [top]

What’s the deadline completing the 210 form?

The deadline for submitting the form due to a share sale within 30 days from the date of the sale of shares no longer applies. The forms are presented after the end of the calendar year in question during a presentation "window" each January. [top]

How much does it cost?

Our inclusive charge for share sales is £29.50 (£19.50 for customers of partner brokers). For this we will complete the 210 form on your behalf, present it in Spain and send you confirmation.

We will then provide detailed guidance to enable you to obtain a certificate of residence from the UK tax authorities ("HMRC") and will also deliver this to the Spanish tax authorities for you. There are no hidden or additional charges.

All post and telephone calls to us are free from the UK. [top]

Which Are Your "Partner Stockbrokers"

We offer a discount to clients of Cardale Asset Management, Charles Stanley, Fidelity and Redmayne Bentley. An integrated tax return service is also provided at no additional charge for clients selling Santander shares via Abbey Sharedealing. [top]

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