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Spanish Property Tax & UK Budget Updates

By Mark Roach - Tue 29th Jun 2010

Paul Austen, Chartered Accountant and Associate of Wincham Consultants discusses some of the Tax updates in last weeks Emergency Budget which may have an effect on our Spanish Tax solutions of UK Company ownership for properties in Spain.

Last week the Coalition held its much-anticipated Emergency Budget and as well as spending cuts, significant Tax changes have been made and I thought you would like to know about some of the main changes discussed. As always of course the devil is in the detail and we will be analysing the announcements over the coming days to identify changes that were not announced in the public speech and to spot any Tax planning opportunities coming out of the changes.

Some of the main changes are as follows :

Income Tax

Personal Tax free allowance increased from 6,475 per year to 7,475 in April 2011. Long term objective to increase to 10,000.

Higher rate income Tax threshold will remain frozen so higher rate Taxpayers do not benefit.

Corporation and Business Tax

Main rate of Corporation Tax to reduce from 28% to 24% over 4 years from next year.

Reduction in small companies Corporation Tax rate from 21% to 20% next year for the first 300,000 profit per year.

Capital allowances reduced from 20% to 18% from April 2012.


On the 4th of January 2011 main rate of VAT will rise from 17.5% to 20%, food and children's clothing to be kept exempt from VAT.

Capital Gains Tax for individuals

Taxpayers on higher rates will pay Tax on Capital Gains at 28% from 23/06/10.

The 18% rate will remain for people on basic rate.

The 10,100 annual exempt amount will remain.

Entrepreneurs relief will remain and the lifetime allowance be extended to 5m from 2m.

Other Announcements

Furnished Holiday letting changes to be repealed.

This Newsflash is for guidance only, and professional advice should be obtained before acting on any information contained herein. No responsibility can be accepted by Wincham Consultants Ltd, its officers or employees, for loss occasioned to any person as a result of action taken or refrained from in consequence of the contents of this publication.

Owners of Spanish property should contact Wincham IHT today to find out how transfering ownership into a UK Limited company can benefit you and your family.

Comment on this Blog

@Chris, If you purchase the Spanish resale property into a UK Limited Company you will pay 7% Transfer Tax but in some regions it may be more. If Wincham was to invest the Spanish property into a UK Company and then you were to buy the Company then the purchase Tax may be saved and only a 0.5% UK Stamp Duty on purchase value of the Company shares.
Mark Roach - Wincham Consultants Ltd - Tue, 22nd May 2012
If I purchased a Spanish property using a UK ltd company what would be my purchase tax liability ?
Chris Edlin - Thu, 17th May 2012

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