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Company Ownership for Your Spanish Property.

By Mark Roach - Wed 27th Jan 2010

Wincham believes that it is the market leader in the provision of Consultancy Services in respect of corporate ownership of Spanish property. Not only have we been operating in Spain for almost 20 years but we also own a portfolio of Residential and Commercial properties using the UK Company structure. As a company we would not recommend our Clients use any methods that we had not proved ourselves. A UK Corporate property ownership can be extremely Tax efficient, especially in the areas of Inheritance Tax. The majority of our Clients already own property in Spain and we can restructure their ownership of their Spanish property into a UK Limited company.

We are also approached by many Clients who own Spanish property in either Offshore or Spanish SL Companies.

Spanish SL Companies.

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Generally a client who has structured the ownership of their property, using a Spanish SL, will have done so as they have been lead to believe that this method will protect them against Inheritance Tax in Spain. This is not so, as in Spain, it is the Beneficiaries who have to pay the Taxes on death and not the deceased's Estate. This means that whether the non Spanish Domiciled Beneficiaries are inheriting the Shares and assets of the SL Company, or the property directly, then Inheritance Tax will still have to be paid in Spain.

Offshore Company Ownership.

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Offshore Companies registered in places such as The Isle of Man, Gibraltar, Jersey, Guernsey etc, are not part of the EU and, therefore, do not benefit from EU Treaties. Consequently owning a Spanish property in an Offshore Company can be highly expensive as Spain can Tax these Companies annually, it currently taxes the assets of Offshore companies at 3% a year. This means they are paying 3000 euros a year for every 100,000 euros of assets owned in Spain.

A UK Company is not an Offshore company but a Non Resident company of Spain and so is not subject to 3% annual Tax .

Eire Company Ownership (Ireland) .

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Throughout 2009 we have been approached by a number of Clients who would prefer to use an Eire company to own their Spanish property .We are now able to offer our Clients an alternative by way of an Irish Limited company. As Eire is a member of the EU an Irish company can offer many of the same benefits as a UK company in respect of Spanish property ownership.

How can Wincham help?

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Whether you currently own a property in Spain, are about to purchase in Spain or own the property in an Offshore or SL Company, we have a solution and method to help to transfer your property into a UK Limited Company or Irish Company. By owning a property in Spain using a UK Limited Company structure the individual owners are not required to submit a Tax Declaration (Return) in Spain for the ownership, instead the UK Company submits a single Declaration once a year which is submitted and filed at zero as a UK Company does not pay the Tax in Spain.

It is important to remember that these methods are not loop holes but use EU Treaties which are unlikely to be changed or modified. Whilst Spain and the UK are members of the EU they cannot make local Laws that contravene their International Treaties.

It is always necessary to consider every case on an individual basis and our trained Consultants can advise on the best structure to adopt for your own Spanish property ownership. Please contact us by clicking on our logo (above) for further details and to obtain your 'free of charge' Spanish Inheritance Tax illustration demonstrating your potential Tax liability and the potential savings you could make by employing a different structure of ownership.

We are a Company who is a market leader in this area and our unique service is available to all Nationalities including Residents and Non Residents of Spain – for more information please contact us via the above link to our site .

Comment on this Blog

 
Hi Sarah, The UK & Spain Wincham fees start from £5300 including VAT to facilitate the transaction but if we talk directly i can supply a detailed proposal with your exact costings... just click on our logo (above)
Mark Roach, Wincham Consultants Limited - Wed, 5th Nov 2014
Thankyou for your quick response, how much would it cost to set up a limited company.Is it a one off payment, need more info.
Sarah - Wed, 5th Nov 2014
Hi Sarah, If we are instructed to place your Spanish property into a UK Limited Company that Wincham can facilitate from start to finish in Spain and the UK then yourselves and your 2 Sons will be protected from Spanish Inheritance Taxes.
Mark Roach, Wincham Consultants Limited - Tue, 4th Nov 2014
I have lived in Menorca for 12 yrs with my husband in an apartment worth aprox 150.000, would we avoid IHT if we make our home a limited company. We have two adult sons who live in the uk, and would like to leave them our apartment in our will Would we benefit as we don't have any savings to pay IHT when either one of us dies. Thankyou for your advice. .
Sarah - Tue, 4th Nov 2014
Dear Richard, As Spanish Lawyers we have had some Clients who have approached us after 4.5 years of the property owners passing to Probate in Spain which in some cases has been accepted by the Spanish Tax office. Whilst you are waiting for the time-scale to pass by it is important to understand the Beneficiaries only have a 6 month window to notify Spanish Tax office of the death and if not this is a criminal act and if found out within the 4.5 years fines and interest will have to be paid on top of the Spanish Inheritance Tax due. Also the owner is not submitting their annual non Resident Tax returns in Spain whilst still registered as the owners of the property and if any Spanish bank accounts of the deceased are still be used along with paying the property bills in Spain in the deceased name then this is also fraudulent. If you wish to have supplied a free Spanish Inheritance Tax illustration showing the potential Tax liabilities of the Beneficiaries in Spain please email me ?
Mark Roach, Wincham Consultants Limited - Sun, 17th Aug 2014
In respect of the four and half year limitation on collecting inheritance tax, if no probate is registered, how would the Hacienda find out ? Could as an example someone go and denounce the estate for not applying for probate ? The reason I ask I currently hold power of attorney on behalf of the sons of my former wife who died intestate, at the moment we are going down the wait four and half years route. I do not benefit from the estate as we were never officially married and presume that I cannot be held personally liable for any inheritance tax
Richard Atherton - Fri, 8th Aug 2014
It is true that in Spain the statute of limitation period is 4 years and 6 months to Probate and if you are lucky enough the Spanish Government may not chase the Taxes from the Inheritor. Should the Beneficiary or Co-owner of the property in Spain decide to keep quiet until this period is over then you should be aware of the potential problems. (A) The property deeds will be in the name of the person who has passed away so you cannot sell the property. (B) There is no way of raising finance on the property. (C) If there is more than one owner of the property and they pass away before the property is correctly registered in their name, then this will leave double the Inheritance Tax problem and costs to the remaining Beneficiaries. (D) Most Banks in Spain treat the money in the deceased’s name as part of the Estate so may place a hold on any bank account in the name of the Deceased until Probate has been achieved in Spain and any Taxes due have been discharged. This may apply to bank accounts in Spain that are either in single or joint names. If you do not declare to the Spanish Tax Authorities during the 4.5 year period then you have to be prepared not to have access to the money as the account will be frozen and withdrawals cannot be made on the bank account. (E) Should the Spanish Tax Authorities find out that the owner is deceased then the property may be Embargoed by the Spanish Authorities and fines incurred. We currently have a client who has received an Embargo and fine for over €19,000 as her Mothers assets have not been probated within the 6 month time line. But as Thomas states below 'The above does not apply if transferred into a UK Company structure'
Mark Roach, Wincham Consultants Limited - Mon, 20th Dec 2010
I fear a vital piece of information is missing, in as far as the spanish inheritance tax liability prescribes or "falls away" after 5 years from the date of death of the registered owner. That said, it is also the legal responsibility of the Beneficiaries to declare the inheritance within 6 MONTHS. The above does not apply if transferred into a structure
Thomas King - Sat, 18th Dec 2010
Andrew, You can re-finance the loan with a bank on the property and then place the property into the UK Company after the loan has been agreed but if you already own a property in a UK Company then you will have to research which Spanish banks will support your requirement.
Mark Roach - Tue, 5th Oct 2010
i own a property in aloha ,nueva andaluciua.i own the uk company that owns the shares in the original company,set up for timeshare.prop is valed at 290k euros.i wish to try and release circa 120k euros via a mortgage.what are my options?
Andrew Crook - Mon, 4th Oct 2010
You are indeed correct to stay away from anything Offshore as your clients would have to pay 3% a year on the value of the asset to the Spanish Tax Office for the privilege as they are from Offshore Countries not within the EU. As any Nationality in the world can be a Director or Shareholder of a UK Limited Company I do not see why your clients would be put off from using a UK Company instead of an Eire Company. We do however also handle the ownership transfer into or purchase via a Eire Company for clients if this is what they wish to own their Spanish Property in and the process we supply is exactly the same. I understand the advantages are similar to a UK Company but if you contacted me directly (by clicking on our company logo, above) then I can supply the process in more detail to you.
Mark Roach - Mon, 12th Jul 2010
I have clients purchasing property in spain and would like to use a tax efficient vehicle. As off shore is no longer a viable option can you advise the benefits of using an Eire company. The clients would not be too keen on using a UK company.
Alan Cosgrove - Mon, 12th Jul 2010

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