Tuesday, 31 January 2012

Spanish Inheritance Tax (ISD) - professional opinions

January 2012 (Update)
Spanish Inheritance Tax (ISD) is very very different from UK IHT. Yet in many ways, ISD is a 'voluntary' tax which is only paid by those WITHOUT an effective plan.

See what appropriate professionals have to say;

I thought that it might be useful to bring other views on the best solution. Spanish Inheritance Tax (ISD) is and will become and even bigger problem. I think we all need professional advice. 

If you have your own story to tell, please email me

Here are some views from various professional advisers, who have dealt with the problems associated with the ownership of property in Spain and the heartbreaking situations of dealing with inheritance tax.

Chartered Accountant (FCA)
Paul Austen who runs his own practice

Thousands of British people owning Spanish property are unknowingly exposed to this Spanish Tax on their death on the value of their property and the tax falls on the person who inherits the property not on your own estate. Therefore by not protecting yourself against this tax you are handing down a potentially huge liability to your spouse or offspring. Because the property along with any Spanish bank accounts can get tied up in Spanish red tape for sometimes as long as two years, getting money from the property sale is often not an option so your relatives would have to find the money themselves

Andrew Eastwood (British Lawyer, Legal4Spain)

We are increasingly confronted with complicated estate planning cases involving Spanish property. Our clients often require solutions for legally and legitimately mitigating their tax exposure and/ or putting in place special arrangements, to cater for complicated family or beneficial circumstances. In appropriate cases, UK Limited Company Structures have successfully formed a component part of the solution we have provided in achieving our clients' objectives

Martin Ward FCA – owns Spanish property

Within an hour of starting, it was abundantly clear to me that the UK company route was the only sensible way to go. To be blunt, apart from avoiding the nightmare of ISD, if you think UK tax is complex and bureaucratic, I can assure you, if you don’t know already, that Spanish tax is much worse, so better to get away from it altogether.
It quickly became apparent that a DIY approach to transferring a Spanish property to a UK company was not on the cards... for me or anyone else.

Maria L De Castro (Spanish Lawyer)

Restructuring your property now is a legal, intelligent and very simple process to save a small fortune in future taxes for your heirs.
This property strategy takes care of everything for you. The arrangement uses qualified Lawyers, company formation agents, accountants and business consultants to restructure your property ownership.
You will NEVER lose control of the property, and can rent or sell it as you wish

 As background you may wish to read;

Spanish Inheritance tax

Professional Connections
You can get more information by a simple process of working out your own liability or potential liability. Please don’t ‘sweep it under the carpet’!

David Goodall
Financial Pages in Spain