The so-called ‘impuesto de solidaridad a las grandes fortunas’ will be introduced throughout the country, as opposed to decentralising it to the various regions, in a bid to prevent the autonomous communities from amending the tax rates or establishing additional allowances.

Andalucía recently scrapped the current wealth tax for residents and second homeowners. Spanish nationals and expats within the region will no longer pay tax on their global assets over €700,000, International Adviser reports. Founding partner of Spence Clarke, Alistair Spence Clarke said of the move at the time: “We know from discussions in the past with many, many, individuals wishing to move to Spain that they decided they couldn’t, often simply because of wealth tax. So, getting rid of this tax will be a true game changer, especially when combined with near exemption from inheritance tax and the relatively attractive income tax regimes.”

The solidarity tax is planned to be temporary, in place for two years after it is implemented. The tax will be charged on 31st December each year and will apply to individuals with a net worth of over €3 million.

According to the draft legislation, a person’s total combined individual income tax, wealth tax and solidarity tax should not exceed 60% of their taxable income, yet they will be required to pay at least 20% of the solidarity tax, said UK and international tax director at De Giorgio Wealth Management, Nicole Booth.

Should an individual owe wealth and solidarity taxes, the liability under the wealth tax is credited against the solidarity tax for that year, the International Adviser report adds.

In addition, taxpayers will have an allowance of €700,000 as well as €300,000 against the value of their principal home.

Moreover, overseas wealth taxes paid on the same assets may be deducted.

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