 |
|
SPANISH INHERITANCEInheritance Tax on your Spanish property?The Spanish authorities may collect enough Inheritance Tax from British Ex Pats to build a new Navy! Most Foreigners that own Spanish property are blissfully unaware of the draconian inheritance taxes that loom ahead. Unlike the UK, Spanish inheritance tax applies between husbands and wives! If that's not bad enough, Spanish inheritance tax is the beneficiary's responsibility and must be paid within 6 months of death!! Oh well I here you say, "I suppose we could always sell up or borrow against our property?" Sorry go back to 'Go' the property is effectively frozen until the tax has been paid and cannot be sold or used as security for a loan. The amount of tax due depends on the value of the assets bequeathed and relationship of the deceased (Donor) to each beneficiary. Below are some examples of this penal tax that no one seems eager to reveal.
*The above calculations are made assuming all parties are aged 60 and do not own any other assets. Solving the problem There are a number of perfectly legitimate ways to minimise your Spanish inheritance tax liability, but some may be complicated, expensive or restrictive, such as setting up a Spanish limited company and/or off shore trust arrangements. Possibly the simplest and most cost effective method is to create a debt against your property before or even after it is purchased. In other words arrange the biggest possible mortgage you can and keep your funds safely invested in a well regulated off shore jurisdiction such as the UK or Channel Islands. The word is now getting around the British ex-pat community in Spain and more enlightened individuals are taking evasive action by re-mortgaging their properties and shifting the proceeds elsewhere. One of the UK's leading regulated mortgage brokers that provide excellent qualified mortgage advice for Spanish property is Clear Mortgages. Click Here. The money that has been released by your Spanish tax saving mortgage should be invested in euros in order to produce a return that is equal or greater than the euro mortgage interest rate (approximately 3.5%). It is essential that the investment is not high risk and subject to sharp market fluctuations. Unfortunately money placed into a euro bank deposit is unlikely to yield much more than 1.5% each year, so investors need to look elsewhere for much better rates over the longer term. |
  30 Montgomery Way Manchester M26 3TG Tel: 0044(0)161 723 0987 E-mail: info@spain4you.org www.spain4you.org |
