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

Monday, 23 January 2012

Expats and property owners in Spain - No plan for Spanish Inheritance Tax (ISD)?

January 2012: No apologies for telling you as it is! The irony about ISD is that since careful planning can avoid most of the tax, it is actually a ‘Voluntary Tax’

I recommend that you take advantage of a FREE proposal which will tell you the extent of any liability you might have. It commits you to nothing but does put you in the picture.

  • Spanish Inheritance Tax (ISD) is NOT the same as UK IHT

  • A widow’s sad story

  • Why didn’t your lawyer tell you?

This tax is totally different from UK IHT, in fact so different that it is not covered by any Double Tax Treaty between UK and Spain. This article covers anybody who has assets in Spain whether they are resident or non-resident in Spain.

I suspect that it affects everyone who reads this Blog and each of you know many, many people who are also trapped by its implications. Perhaps you could pass it on to friends and neighbours?

But there are solutions

A letter from a Widow

Mrs Holt wrote to me, about a sudden demand for €8,800 plus other costs to transfer ownership into her name following the tragic early and unexpected death of her husband. For a modest second home in Alicante Province, transferring their holiday home will cost more than €10,000. In addition to the ISD there are the Notary costs, land register charge and her own solicitor’s costs.

‘The property I assumed would be signed over to myself, however, after asking our solicitor in Spain to confirm the costs they have included an 8,800 euro inheritance tax.’ She told me. ‘At his time of death we were both working and living full time in the UK and hold residence of the UK.’ She added.

Mr & Mrs Holt bought their dream home in 2002 but the solicitor who handled their purchase never mentioned Spanish ISD. I’m not sure why but they never seem to.

As if coping with a tragic death is not enough, there is a highly significant tax as well!

Yet there are UK solutions which are using the advantage of EU treaties, yet complying with Spanish Law. Rather than tell you more here, I suggest that you look at your own situation and get a free quotation based individually on your own circumstances.

Please click on the section 'Check YOUR Spanish Inheritance Tax liability' in the right hand column.

As always, you can also contact me by sending an email

David Goodall
Financial Pages in Spain

PS If you’d rather pay this ‘voluntary tax’ – do nothing!

Wednesday, 18 January 2012

Getting a Second Opinion

I have been finding for sometime that many people come to me for a ‘second opinion’. For QROPS, QNUPS, UK Pensions, Investments, they are unhappy with the advice they have been given and send me examples.

Rather than guesswork people also ask me to recommend Accountants, Lawyers, Surveyors and other professionals.

Some of the things people have said to me:

  • ‘ It  looked like a mass produced QROPS report with just my name and personal details changed’

  • ‘ They wanted an up front fee even to talk to me, funny they never mention that in their adverts’

  • ‘ I wasn’t convinced the advice was correct’

But they trust ‘Financial Pages in Spain’ and I am receiving comments which show a great deal of respect.

I’ll try to help. Email me

Can you help me to help you?

  • Please send me both good and bad examples of reports you have received, from financial advisers, I’ll respect your privacy
  • Tell me the names of Advisers who refuse to disclose commissions
  • If the fees, charges and commissions are hidden in a report and not openly disclosed, please send examples

This sort of information will help everyone and help eradicate some of the greedy practices.

I may not have intended it when I started out but it seems that Financial Pages in Spain is becoming the respected second opinion.

* * * * * * *

Whatever your query, please write to me. My email is on this link

David Goodall
Financial Pages in Spain

Tuesday, 10 January 2012

Spanish Inheritance Tax (ISD)

Impuesto sombre sucesiones y donaciones

The New Conservative Government in Spain has a major project to substantially increase the tax it collects in 2012. Yet ISD is effectively a ‘voluntary tax’ that you only pay if you don’t plan for it.

  • Details and scope of ISD
  • What various professionals say
  • Non-residents ARE liable

Are there any solutions? Please read on

No ISD is payable if the property is owned by a UK company, since even if a shareholder dies, the company can continue in existence and the shares passed on to a beneficiary under UK rules.

In recent months, my blog has carried several posts dealing with the very complex subject of Spanish Inheritance Tax (ISD). This is very definitely a subject on which you need professional advice. To access a professional please email me.

  • Detailed reading for a thorough understanding of ISD is probably best from my post on July 18th 2011. This is the link;

  • 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.

  • Expats and property owners in Spain - No plan for Spanish Inheritance Tax? This post includes a Widow’s sad story and the inevitable question ‘why didn’t anyone tell us’?

The question ‘why didn’t anyone tell us?’ is probably the one I get asked most often. One of the key objectives of my blog is to provide INFORMATION. I do not and will not take advertisements from financial companies. I give links only to offers and services which I have used myself or I have tested.

This leads me to understand that people working in property, financial advisers, mortgage broking, pensions, lawyers and other financial services must be open in all dealings with clients.

  • Openly disclose all commission and charges
  • Tell clients how it is – good and bad
  • Please, please, please tell them about Spanish Inheritance Tax (ISD)

I am happy to receive feedback, answer questions or refer to appropriate professionals if you email me

David Goodall
Financial Pages in Spain