BKL tax partner David Whiscombe has commented via the UK200Group on news that Germany wants wealthy householders to pay towards the costs of any future bail-outs for weaker members of the eurozone.
The plans could see a new ‘wealth tax’ imposed on property and other assets. However, this could affect British citizens with holiday homes in places such as Spain, who could have new taxes imposed on their properties if, for example, Spain’s government was forced to seek a bail-out. Germany argues that richer homeowners in other countries have so far avoided paying their fair share to rescue the euro.
“Upsetting as it would be to UK residents with homes in Spain, there’s a compelling kind of logic. If you acquire real property in some overseas jurisdiction, there is surely an implicit agreement that you subject yourself to that country’s rules. After all, isn’t that exactly what the UK has just done in regard to the changes in the taxation of expensive dwellings in the UK?
“You can certainly argue about whether it’s right for Spain to confiscate a slice of people’s assets: but if you accept that it’s okay in principle, you can’t logically object to UK owners of Spanish property being required to share the pain. If the UK government did such a thing, can you imagine the uproar if property owned by non-residents were exempted?”
