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How to protect your cash in a Spanish bank on death!

By Mark Roach - Thu 9th Jun 2011

I saw a question on a forum recently about a gentleman who was concerned that when his wife passes away that their bank in Spain will freeze the account and he will not have access to the funds.

Unfortunately this is very common across Spain and it means that the surviving spouse cannot use the funds in the account to pay Spanish Probate or Inheritance Taxes that will be due on their cash and property that they may own in Spain. Not only is this a very distressing situation but the beneficiary only has 6 months to probate in Spain otherwise fines and interest may be charged by the Tax Office in Spain.

Our suggestion: to avoid this happening, if you own a property in Spain is to instruct Wincham to invest your property into an individually owned UK Limited Company. We can facilitate the process from start to finish for you.

Once the property is owned by the UK Company the owners receive shares in exchange for their investment. These shares are then the assets, owned by the owners and it is those shares which are subject to Taxation outside of Spain. One demonstration of the advantage here is that if the owners are British and also married and leave each otherís half to one another, then they will inherit under UK Law, where Inheritance Tax is exempt between spouses, unlike Spain, where a spouse only receives an allowance of Ä15,957 if they are not classed as Resident of Spain when inheriting.

After registering the property to the UK Company our office in Spain will help the client's Company setup a Spanish bank account, and then move all the utility, Suma, IBI and other bills into the Company name. After this is completed then the property owners do not require a personal bank account in Spain and all their funds can be held in their own Company bank account which does not become frozen on death unlike a personal account does.

Wincham has been established since 1994 and we believe that we are the market leader in helping clients own property in Spain via a UK Limited Company structure and if you would like to hear of the many more benefits then please contact one of our Consultants in the UK or Spain on the details below. Our Consultants will also supply a free of charge Spanish Inheritance illustration demonstrating the Tax liabilities that the beneficiaries of the property may have when the property passes between individual peopleís names.

Finally I would like to address a recent article in the Spanish press stating how Inheritance Tax in the Region of Catalonia is being reviewed. It is very important to be aware that each Region of Spain can set it owns laws for Residents but beneficiaries who inherit as non-Residents of Spain are taxed by the central Tax Office in Madrid, even if the deceased was Resident of Spain, which in most cases is the situation that we find, so the Regional Laws are irrelevant in these situations.

Why not contact us today by clicking Here to find out how we can help protect your assets and Spanish property in the event of your passing ?

Comment on this Blog

 
Hi Gordon, If you wish to apply to Wincham for a free Spanish Inheritance Tax illustration showing the Inheritance Tax liabilities in Spain if you leave the property in your own names and our proposal with the full costs and process then please complete the form on the Wincham website via the Wincham Consultants Limited blue & white logo just above.
Mark Roach, Wincham Consultants Ltd - Mon, 18th Feb 2013
My wife and I are joint owners of a small property in Spain. The value catastral is 68939.20 euros. We are both non-residents in Spain. We come to spain for the winter 3 months. Our country of residency is the UK. What would be cost of setting up a UK company for the house? what would be the tax implications in the UK, i.e. benefits in kind?
Gordon Pryor - Sat, 16th Feb 2013
Dear Brian, In Spain a mortgage and a loan are 2 separate items as the mortgage is the charge / guarantee for the loan lent against the property. A Mortgage (Hipoteca) is recorded against the property on a public deed. Once the property is in the ownership of your Company then the loan repayments can be made from the Company bank account. The bank account will be funded by the owners of the Company or from income that is collected from the property. The interest and other expenses can then be offset against any income to the company which cannot be done if the property is in your own name.
Mark Roach, Wincham Consultants Ltd - Sat, 5th Nov 2011
Does a Spanish property need to be mortgage free to be invested in a UK limited company or can you arrange for the limited company to take over the mortgage ? Thanks in advance
Brian Crookston - Wed, 2nd Nov 2011

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