Jaime Vives

Director (Spain)

Wincham Consultants Limited

Subscribe to my blog

By Jaime Vives - Wed 2th Nov 2011

 

Tumbit Approved Partner

As the Spanish tax year draws to a close we would like to take this opportunity to remind you of the benefits of placing your Spanish property into your own UK Company (which we can provide) before the end of this year to mitigate Spanish taxation.

Personal Tax Declarations

If you own a property in Spain, whether as a Resident or not you have a legal obligation to submit a Tax Declaration to the Spanish Government detailing income deriving from the property. Non Residents who do not receive income from the property incur income Tax based on the value of the property.

However, if by the 1st January 2012 you have invested your Spanish property into your own UK Company then you will not be required to submit a personal declaration unless you are a Spanish Resident. If the property is owned by a UK Company a declaration does have to be submitted, this does not have to include an assumed rental income.

Wealth Tax

The Wealth Tax in Spain is part of the annual Tax Declaration and had previously been reduced to zero but in recent months the Spanish Government has revised and increased this rate for some property Owners. Companies Spanish or UK are not liable for Wealth Tax and therefore transferring your property into a UK Company before the 1st January 2012 would be very beneficial and could save this potentially costly Tax.

Offshore Companies

Offshore Companies based in countries such as Gibraltar, The Isle of Man, Jersey and Guernsey which own Spanish property are charged an annual tax by the Spanish Government of 3% of the value of the property. The UK has a treaty with Spain so UK companies do not incur this Tax.

Plusvalia Tax

Plusvalia is a Tax on the land which your property stands on and is taxed by your Town Hall from the last date a change was made at the Land Registry or the date you took ownership. The Plusvalia is payable when your sell the property, by the Beneficiaries when they inherit the property or when you change ownership into a UK Company. This means it makes more sense to pay this Tax today as part of the costs in moving the ownership into a UK Company as the Tax owing will be greater in 2012.

UK Limited Company Ownership

In summary there are many taxation benefits to investing your property into your own UK Limited Company, which we can provide. There are also many additional benefits and the ownership of the company can be structured to suit your Beneficiaries needs in a way that is simply not possible under Spanish law. Now is the ideal time before the end of the year to make the change to maximise the benefit. We have consultants available to explain all of the benefits for you and your beneficiaries. They can provide you with a free personal tax illustration and discuss any individual requirements. We are the market leader in this area with years of experience in dealing with Spanish taxation and have offices both in the UK and Spain.

Why not contact us today by clicking the link HERE to find out how we can help you with this issue ?