HMRC tells Brits to declare overseas earnings in tax evasion crackdown

THE British government has told its taxpayers, including those living abroad, that they must declare their earnings on overseas assets by September 30 or face penalties.

HM Revenue and Customs (HMRC), the country’s tax collecting authority, said the call was aimed at those who have not informed officials of assets and earnings outside the country. It relates to earnings which come under income, capital gains or inheritance levies.

The deadline follows the passing of new tax rules in Britain which are designed to target those who stash undeclared earnings foreign assets, according to Treasury sources.

It comes as Britain is set to join the Common Reporting Standard (CRS) system this October which allows a total of 100 countries, including Spain, to share financial accounts data.

Mel Stride, the British government’s Financial Secretary to the Treasury, said he urged anyone who had not already contacted HMRC to declare overseas assets to do so.

"We will continue to relentlessly crack down on those not playing by the rules," Stride said.

"This new measure will place higher penalties on those who do not contact HMRC and sure their offshore tax liabilities are correct," he added.

The Treasury said in a statement that earnings from renting out holiday homes and other overseas properties were liable to be taxed.

If a taxpayer notified HMRC by September 30 they would then have 90 days to fully disclose their earnings and pay any tax owed.

“If taxpayers are confident that their affairs are in order they do not need to worry. If anyone is unsure, HMRC recommends they seek advice from a professional tax advisor,” the government department said.

The Treasury added those wishing to declare could do so by using its digital disclosure service, telling an HMRC official or any other method agreed with tax collectors.

Stride said the government had recovered the equivalent of more than €3 billion in undeclared earnings since 2010.

Spanish Inheritance and Gift Tax increase for 2017 within numerous regions of Spain.

So far in 2017 most of the regions (autonomous communities) in Spain have introduced legal changes affecting Tax rules and laws. This year there are Tax modifications affecting both Inheritance and Gift Tax.

The Law 13/2016 of December 29, has changed the main Valencian Tax Law 13/1997 that regulates among others, the Inheritance and Gift Tax in the Valencian region.

For Spanish Inheritance Tax and Gift Tax purposes the law distinguishes between four Groups, depending on the relation of the deceased or donor.

• Group One: Descendants under 21 years old.
• Group Two: Descendants and Adoptive Children over 21 years old, Spouses, Parents, and Adoptive Parents.
• Group Three: Brothers, Sisters, Nephews, Nieces, Aunts, and Uncles.
• Group Four: Relatives in 4th Degree and Friends

Until now, the Valencia Tax Laws foresaw, together with other tax benefits, a tax allowance of 75 per cent of the tax to be paid when the heirs belonged to groups one and two. For 2017, it has kept the allowance at 75 per cent for heir’s belonging to group one, but for the heirs from group two, the allowance has been radically reduced to only 50 per cent.

In regards to Spanish Gift Tax, the allowance for groups one and two no longer applies.

Fortunately there is still a reduction for heirs and beneficiaries from groups one and two as they will not pay any Spanish Inheritance or Gift Tax for the first €100,000. It however must be noted that this ruling, does not apply to spouses when they receive a gift and therefore cannot benefit from the €100,000 tax free.

It should however be noted that the Valencian Tax Regulations regarding gifts and Spanish inheritance tax are still more beneficial for tax payers than those of many other regions of Spain, and provide more tax benefits than the non-resident tax rates and laws.

Wincham Property Services & Management

A new Service from Wincham International Limited. Over the years many Clients have asked us if we can provide a local reliable and legal Property Management Service.

We are pleased to announce that this service is now available in certain areas - this will be expanded over time.

Presently we can offer the service in the area from Benidorm to Javea on the Costa Blanca.

The department is run by a very experienced property facilities manager Jose Such, who has many years’ experience in the Property Maintenance business.

Our Company is now offering services from key holding and property visits to all types of property maintenance and building works. We can look after your property whilst you are back home and make sure that your asset is safe and secure.

Before you or your guests visit we can attend the property and make sure that all is well. If there are issues we will report to you with the solution and costs. We can then undertake any work required before you or your guests arrive.

We can provide Cleaning and Laundry services if required and be the contact if your guests have any problems.

We can supply all qualified tradesmen, in a legal and insured state and we will monitor and manage all works undertaken.

We will account to you for all costs and agree with you any expenditure in advance. We will provide a legal Factura (Invoice) for all works undertaken.

Services Available

Key Holding Service

We can hold a set of keys and visit your property prior to your arrival and make sure all is well. We will report any issues that may need attention and provide a solution and estimate of costs. This basic service only costs 150 euros (+IVA) per year. For 350 euros (+IVA) we will visit your property at least once per month and check the services and property condition and security and will report any issues arising.

Cleaning and Laundry

All our cleaners and laundry staff are vetted and managed and a high standard of service is maintained. You can tailor the service to your requirements and Jose will make sure that all is right for you and your guests.

Pool and Garden

We can provide these services on a regular contract throughout the year and to your requirements. We can provide all materials and inventory if required.

Painting and Decorating

We can arrange to have your property painted inside and out as required. The specified work will be undertaken to a high standard by local skilled workers.

Electrical and Gas Works

We can provide qualified workers to undertake these works and provide the required certificates (Boletins) for letting. We can undertake all works from changing and fitting new sockets to complete rewiring or plumbing in a new bathroom, Kitchen or Boiler.

General Maintenance

We can undertake all maintenance works from repairing or replacing the roof to replacing doors and windows, plastering and general building works as well as extensions and patios.

Hourly Rates

Generally the hourly rate will be between 19 and 30 euros (+IVA) per hour depending on the skills required. Materials will always be supplied at cost against a submitted invoice.

We will always provide you with a written estimate of the labour and materials before we start any work.

In some instances we will recommend that a surveyor views the property before work starts especially in areas of potential ground slip or water runoff.

If we can be of assistance in any of the areas stated please give us a call at our office either +44(0)1260 299 700 or 0034 965 830 991 or send email at info@wincham.com

For further information or to make an online enquiry please click here.

Inheritance Tax increases in the Murcia & Valencia Region

As of 11th July 2013 the Murcia region increased Inheritance Tax (IHT) payable by residents inheriting within this region. Before this time Group 2 Resident Beneficiaries (spouses and biological children over 21) of the Murcia community benefitted from a 99% exemption on assets they inherited within their region however, this has now been reduced to a standard allowance of €15,957. From 6th August 2013 Valencia resident spouses, descendants and ascendants had their personal free allowances upon inheritance, increased to €100,000, or reduced in the case of gifting. However, the exemption for assets inherited above the €100,000 allowance was lowered to only 75%. There are no such exemptions for brothers / sisters / aunts / uncles / nephews /partners or friends.

From January the 1st 2012 CGT for non-resident property owners in Spain will stand at 21% across the board. This follows a previous rise in 2010 from 18% to 19%.

Resident's Inheritance Tax in Spain is charged by the autonomous region they live within, however all non-residents who inherit assets on mainland Spain, The Balearic Islands and The Canaries are all taxed by the central Tax office in Madrid with a maximum allowance of €15,957 per individual inheriting.

Many Spanish tax residents may now look forward to sizeable tax increases which have already affected Murcia & Valencian residents during 2013. It could be said that other regions may decide to follow suit in the near future. A concern for most beneficiaries is that bank accounts can be frozen on death leaving any money to pay this tax unavailable within the 6 months stipulated and in worst case scenario an embargo placed upon the property. Simply becoming non-resident, which has been seen as a solution to the recent asset declaration problem, would not work here as the IHT due for non-residents is significantly more and taxed centrally in Madrid.

It has been written that this is discrimination against non-residents of Spain and they will be taxed at a lower rate and in line with residents. As this may not be financially viable to the Spanish Government, residents may be brought in line and taxed at a higher rate along with non-residents.

The Wincham Solution

The owner of the property forms a UK Limited Company (Wincham can provide), in which ownership of the property passes into the company. In this way when he or she passes away, the company will be inherited meaning it will only be necessary to transfer company shares, which fall outside Spanish inheritance tax.

From the point of transfer the Company owns the asset. As the legal company owner, you remain in full control of the company - in addition there is no Property Transfer Tax (7-10%) or Capital Gains Tax due in Spain for this transaction.

To receive your free personalised Spanish Inheritance tax Illustration and the opportunity to discuss how this method of ownership could benefit your circumstances, visit www.winchamiht.com. Alternatively contact one of our advisers directly on +44 (0)1260 299 700 (UK) or 0034 965 830 991 (Spain).

Spanish Energy Performance Certificates- your requirements explained

What is the new law in Spain?
As you may or may not be aware from 1st June 2013 a new energy efficiency law for Spanish properties was introduced requiring any property used for rental or for sale after this time to have an “Energy Performance Certificate” also known in Spain as the Certificado de Eficiencia Energetica (CEE), a document describing how efficient the energy consumption is. Each property will be tested and scored on a scale ranging from A to G, with ‘A' being extremely efficient and ‘G' being particularly inefficient. This measure is a European directive aiming to increase energy efficiency in buildings and homes in order to protect the environment, and makes it compulsory for all new and existing properties which come onto the market, whether for sale or for rent, to have this certificate.

How does this affect you and your property?
All homeowners who want to sell or rent their property (for more than 4 months) must make this "energy certificate" available to the prospective buyer and/or tenant.

The owner of the home, building, or business premises will be responsible for obtaining and paying for the certificate, which they will need in order to sell or rent their home. In addition to the certificate, each home will also receive a series of recommendations to improve the energy performance of the home and enable it to go up at least one level in the energy efficiency scale. The certificate is valid for 10 years and will only need renewing if modifications or alterations are made to the property within this time.

How to obtain a certificate for your property?
Wincham can organise an energy efficiency certificate for any property owner whether an existing or new client. The process generally involves a visit to the property to take measurements and collect information before drawing up and certifying the report.

The EPC prices are as follows:
- Up to 100m2 - 155€ + IVA (187.55€)
- Between 100m2-200m2 - 195€ + IVA (235.95€)
- Between 200m2 - 300m2 - 215€ + IVA (260.15€)
- Up to 400m2 - 280€ + IVA (338.80€)
- Over 400m2 - Please contact us

What are the penalties for not complying?
The penalties for non-compliance with the new energy certification law were published, revealing that fines of between 300 and 6,000 euros will be levied on owners who fail to comply. The fines will be split into three levels dependent upon the severity of the infraction:

- Minor offences: €300-600
- Serious offences: €601-1,000
- Very serious offences: €1,001-6,000

For further information or to book now please click here or contact our offices directly on +44 (0)1260 299700 (UK) or 0034 965 830 991 (Spain).

Payment can be made by debit card in Sterling via our currency exchange system or by bank transfer.

The EPC is arranged and organised by a third party provider. Wincham cannot be held responsible for any errors, omissions or monetary loss from funds held by the provider.

Wincham has success with "Tea on the Terrace"

Wincham Consultants has experienced an increased demand in enquiries from Spanish property owners worrying about the issue of Spanish Inheritance Tax (IHT). The Company has recently expanded their operation from the Costa Blanca along the coast to their new office in Marbella, Costa del Sol. In April and May they successfully hosted “Tea on the Terrace” at various venues in and around Fuengirola , Estepona and Marbella offering new and existing clients the opportunity to discuss their personal circumstances on a one-to-one basis providing a free of charge Inheritance Tax illustration.

Before contacting Wincham most property owners are either unaware or have been misled about the potential financial burden their beneficiaries may face upon their death. The surviving partner, or beneficiaries, may have a tax bill which exceeds the value of the entire Spanish asset being inherited plus the cost of obtaining probate in more than one country.

The Wincham solution to the IHT/ISD problem in Spain is for the owner/s to invest their Spanish property into a new UK company where the owners are both the shareholders and directors and remain in complete control of their asset. (There is no 7-10% Property Transfer Tax payable on this transaction). The property then becomes a UK company owned asset and as such comes under UK tax law. Any transfers between a husband and wife in the UK are tax exempt. Each individual has an allowance of £325,000 before IHT is payable in the UK and a couple would therefore have a combined allowance of £650,000.

The professionals at Wincham in the UK and Spain are on-hand to help clients through this process as smoothly as possible. There are many taxation benefits when investing a property into your own UK Limited Company together with the ability to structure the ownership of the Company to suit Beneficiaries needs in a way that is simply not possible under Spanish law.

Director, Mark Roach commented on the events “We were very happy with the interest received regarding Tea on The Terrace and would like to thank clients for taking the time to visit us and the venues for their support in the success. We are looking forward to our next event in September which will hopefully give people further opportunity to come and talk to us in person”.

If you would like to be updated on future Wincham events or find out more about the implications of Spanish IHT and the legal steps you can take to avoid it visit www.winchamiht.com and register your details, or telephone a Consultant directly on 0034 965 830 991 / +44 (0)1260 299 700.

Wincham International is also able to assist you with Legal, Accountancy, Will Writing and Probate issues in both the UK and Spain.

Wincham launches Marbella Office

Wincham now has offices located on the Costa del Sol in addition to the existing Head Offices at Calpe, Alicante and Cheshire, UK. The launch of the Marbella based service will be managed and operated by Mark Bailey and David Rogers.

Mark joins Wincham after 25 years in financial services, "Having lived and worked in Spain for many years we are very aware of the amount of people who have purchased properties in Spain without fully understanding the implications of Spanish inheritance tax (IHT). When purchasing property in Spain owners are often urged to set up a Spanish Will in the belief that this will shield their beneficiaries from Spanish IHT. This is unfortunately untrue, a Spanish Will is not a solution to remove tax and can often complicate matters as it may conflict with an earlier Will prepared. Our experience shows that in the majority of cases people are not being given the complete picture from the outset and as such their families are being subjected to potentially onerous taxes that could simply be avoided. Wincham offers a comprehensive service covering UK and Spanish legal and taxation matters and it prides itself in providing an informative and innovative approach to its client's requirements. We look forward to meeting clients here in Marbella and offering a suitable, effective solution to individual IHT problems"

David Rogers, adds over 20 years’ experience in a number of senior management and directorial positions. Having obtained the "Award in Financial Planning" (AWF) from the Chartered Insurance Institute, David relocated to Spain in 2004 and has since established an extensive network belonging to numerous professional network organisations including the British Chamber of Commerce.

Wincham has been operating in Spain for almost 20 years and owns a portfolio of properties using the same UK Company structure which they advise clients to use. Quite simply clients invest their Spanish property into their own UK Company (which Wincham can supply) of which they will be the Director and shareholder ensuring they remain in control of the asset whilst eradicating Spanish IHT. All Clients who use their services are also covered by 20 years Title Deed Insurance including Demolition Order, Fraud, Compulsory Purchase and up to 20 areas to a maximum of €360,000 compensation.

There are many taxation benefits when investing a property into your own UK Limited Company; in addition the ownership of the company can be structured to suit Beneficiaries needs in a way that is simply not possible under Spanish law. If you would like to know more about The Wincham solution, receive your ‘complimentary’ Spanish Inheritance Tax illustration or meet with one of our trained consultants at any of our 3 offices please visit www.winchamiht.com or complete the enquiry form via this link here. Alternatively contact us directly on +44 (0)1260 299 700 (UK) or 0034 965 830 991 (Spain).

Wincham International is also able to assist you with Legal, Accountancy, Will Writing and Probate issues in both the UK and Spain.

Wincham Seminar proves a success at The Manchester Airport Marriott Hotel

Both clients and local professionals were invited to the second seminar held at the Manchester Airport Marriott hotel on Wednesday 19th September. Two sessions were held at the Conference centre with a presentation from our Tax Consultants, Group Accountant and in-house Solicitor followed by a Q&A opportunity to our panel of Experts including Managing Director and founder, Malcolm Roach.

The initial session briefed local Accountants and Solicitors on the services we can offer to them and their Clients. During the evening Clients local to the area were able to meet our experts who explained in detail our services and answered questions on the Inheritance Tax solution that Wincham offers.

At the end of each presentation individuals were able to speak in person with Consultants to discuss their personal circumstances and how Wincham could help find a solution to common problems that we assist with every day.

We are currently planning our next series of seminars which may be in a town near you. If you would be interested in meeting us in person please contact us. In the meantime, we shall update all clients and Agents as soon as confirmation has been made and look forward to seeing you there.

Increase in Transfer Tax on Resale Property Purchase’s

Many of our clients tell us that they have been advised by other professionals that Spanish Taxation is likely to decrease in coming years and that Inheritance Tax (IHT) should not be an issue. However, this may not be the case, with the on-going financial crisis still affecting the Spanish economy there has been a certain amount of pressure placed upon autonomous regions to try to combat the lack of funds by raising Taxes. The Andalusian Region has increased Taxes including those on resale property purchases, and other regions of Spain such as The Balearic Islands and Asturias have followed suit.

Spanish Resale Property Transfer / Purchase Tax

Prior to 2012 in Andalucía if you were purchasing a resale property you had to pay a 7% Tax on the purchase price. As of the 1st January 2012, the Tax on the purchase of resale properties up to €400.000 has risen to 8%, on the amount above €400.000 you have to now pay 9% and if you are buying for over €700.000 then the Tax on that amount rises to 10%.

In essence Taxes on resale purchases have not decreased, but have in fact increased overall.

As we have previously written, over the past 12 months alone in Spain both residents and non-residents have experienced the following increases;-

• Capital Gains Tax (CGT) Increased
• Wealth Tax Reintroduced
• Non Resident Income Tax Increased
• Spanish Resident Income Tax Increased

How can Wincham help?

An effective solution to the IHT problem in Spain is to purchase the property into a UK Private Limited company which the purchaser’s would own as Shareholders. A UK company is not an offshore company as is a company of Gibraltar or the Isle of Man, which would be charged an annual Tax by Spain of 3%.

Contrary to popular belief there may be no property Purchase Tax payable on this transaction, unlike other property transactions in Spain.

Should you wish to sell the property in the future then there are 2 methods of doing so as the property can be sold independently by the Company or the shares in the Company can be sold to the purchaser which may save the Purchase Tax for the buyer and 3% Withholding Tax to the seller.

It is always necessary to consider every case on an individual basis and our trained Consultants can advise on the best structure to adopt for your own circumstances of Spanish property ownership. Please call to speak to one of our Consultants on the numbers below or visit our website www.winchamiht.com for further details and to obtain your ‘free of charge’ Spanish Inheritance Tax illustration demonstrating your potential Tax liability and the savings you could make by not purchasing in your own name but a UK Limited Company structure.

Title Deeds Insurance now included for ALL Wincham clients

Wincham International Ltd are delighted to announce that from the 7th March 2012 all Clients who use our services to purchase or invest a Spanish property into a UK limited company will now be covered by Title Deed Insurance. We are the only company to offer this cover as standard for all our clients which provides up to 360,000 € cover.

As market leaders and with combined professional experience of over 65 years, at Wincham we understand that security and peace of mind are foremost in the minds of our clients – particularly where the property in question may not be used as a permanent residence but for rental and occasional use.

With this in mind we will now be providing all our clients with a brand new insurance product offering our clients a complete guarantee and minimising future risk for 20 years.

The policy covers amongst many other benefits the following:

• Demolition Order: Imagine that after several years a Demolition Order is placed on your house because it is shown that the associated building licence is illegal because it infringed land classification (Urban Planning Scheme) at the time of purchase, or simply because your house was built without a licence or in breach of the terms of the building.
  
  
  • Real event: Catral Alicante. 1,400 dwellings illegally built in collaboration with the Town Hall who issued forged documents.
  • Real event. Marbella, Málaga. Around 20,000 illegal homes built breaking the Urban Planning Scheme (PGOU).
  • Real event: Vera, Almería. Homes belonging to British pensioners demolished due to a building license revocation.
• Fraud: By virtue of article 34 of Spanish law “Ley Hipotecaria” you may lose your home in the event of fraudsters faking your identity and selling your house to a third party who is purchasing in good faith and registering at the land registry.
  
  Imagine when you are away from your home in Spain:
  
  
  • Real event: Police identify a ring of fraudsters faking identities of real home owners to sell the houses for a derisory price. First they rent the house and then forge the property title deeds and ID cards which enables them to sell before a notary.
  • Sentence of Spanish Supreme Court of 20th May 2008 cancelled the Revoked Powers Register and exempted notaries from legality control tasks therefore reducing their involvement to that of mere witnesses to property transactions. Notaries warned that “there will be more fraud”.
• Compulsory Purchase: You discover your house is subject to a compulsory purchase order or proceedings which predated your purchase. There are cases where not onlyis your land compulsorily purchased but you will also have to pay a large administrative fee.
  
  
  • Real event: Spanish Coastal Law. 500,000 owners have been affected by total and partial compulsory purchases of their homes in recent years. Spanish Coastal Law is very controversial due to its arbitrary actions to qualify the land in terms of beach or dune areas to be compulsory purchased by Government.
  • Real event: Valencian Land Grab. Around 20,000 compulsory purchases made by virtue of land Spanish laws LRAU and LUV.

There are up to 20 more areas covered in this comprehensive package and a maximum of 360,000 € of compensation for the Insured as damages.

For more information download the brochure and policy in full.

Spanish Wills will not protect you from Spanish IHT

Non-residents purchasing properties in Spain are often urged to set up a Spanish Will in the belief this will shield them from Spanish IHT.

This is unfortunately untrue and a Spanish Will can often complicate matters as it may conflict with an earlier Will prepared in the UK. A Spanish Will cannot be varied after death and therefore limits the options of the beneficiaries. If there is only a UK Will then with agreement of the beneficiaries the Will can be varied to accommodate the inheritor’s wishes. The only requirement of the Spanish authorities is to be presented with a death certificate and Grant of Probabte from the UK, translated, notorised and apostiled.

A Spanish Will is registered in a central location in Madrid and once it has been registered you cannot proceed to change it without going through the process of cancelling the old one through the Notary that dealt with your original Will. This can be time consuming and very costly.

In the UK if you wish to change your Will you simply write a new one stating that the old one is revoked.

In order to obtain a Spanish Probate you will require an Abogado (Spanish lawyer) and beneficiaries will be liable to pay any inheritance tax personally. Unlike the UK the inheritance tax is paid by the individual beneficiary based upon their circumstances not by the Estate. Inheritance tax laws in Spain provide that immovable assets such as property cannot be realised in order to pay the inheritance taxes due.

If you are married or you have a joint account in Spain then it means that your Spouse or joint account holder will be unable to access funds in that account until probate has been completed in Spain. This often leaves them in the position of being unable to make funeral arrangements or return to the UK as they do not have access to their funds.

To deal with the sale of the property or to arrange for the transfer into their own names each beneficiary will need to attend Spain personally to obtain an NIE number and deal with Notaries and Spanish authorities often in a country that they are not familiar with.

We can assist with every step and guide you through the whole process with the assistance of our multi-lingual staff based in our Spanish office.

The Wincham Executor & Trustee Company Ltd provides a professional Will writing service for new and existing clients. Our legal department has all the expertise you need to prepare a Will that is suitable and fit for the purpose. We also offer an Executor service to help with Probate and the form filling and bureaucracy involved when an individual passes away. You and your family can continue to enjoy the future in the knowledge that all your affairs are completely taken care of. You can buy cheaper on the web, but we do not recommend these. Estates are too important to have everything reduced to a simple and standard common denominator, and a Will intended as a catchall may not catch anything if individual circumstances are not established and properly catered for in the Will. A Will is an important document and can affect people’s lives. Wincham Executor & Trustee Company Limited provide a bespoke Will service which supplies a considered and appropriate tailor made Will prepared at an affordable price. You may think you know what you need in a Will, but the help and advice offered by Wincham quite often leads to clients re-appraising their Wills. The most important part of the process is the estate planning as work may need to be undertaken now to provide the best outcome later and you cannot always rely on the contents of the Will.

Visit us at www.winchamwills.com or call /email us on -
Phone: +44 (0)1260 299 700
Email: teressa.McDonald@winchamiht.com

The Spanish Property Inheritance Tax Ticking Time Bomb

Inheritance Tax may be payable in two jurisdictions by owners of Spanish Property - Spain and the UK.

In Spain it is the person who is inheriting the property that is taxed whereas in the UK it is the estate that is taxed. This means that on the death of an owner of a Spanish property, the surviving Spouse and/or any other Beneficiaries will need to probate the Estate in both Spain and the UK.

Inheritance tax laws in Spain provide that immovable assets such as property cannot be realised in order to pay the inheritance taxes due.

Common Misconceptions:

1. A Spanish Will negates the problem
Incorrect – a Spanish will can often complicate matters as it may conflict with an earlier Will prepared in the UK. A Spanish Will cannot be varied after death and therefore limits the options of the beneficiaries. If there is only a UK Will then with agreement of the beneficiaries the Will can be varied to accommodate the inheritors wishes. The only requirement of the Spanish authorities is to be presented with a death certificate and letters of administration from the UK, translated, notorised and apostiled.

2. Double taxation treaties between Spain and the UK will help with the tax being reduced.
While this is true in respect of identical taxes, Inheritance Tax is not subject to this rule due to two different entities being the subject of the Tax. In the UK it is the estate which is taxed and in Spain it is the beneficiaries who are taxed meaning that one tax cannot necessarily be offset against the other. Unilateral relief is potentially available in the UK but is complicated to establish and may only allow a small percentage of the taxes paid in Spain to be offset against UK inheritance tax.

3. Re-financing the property will avoid IHT.
If there is a mortgage on the property (Hipoteca) and a loan subject to that mortgage then effectively the property owner does not own that part of the property subject to the loan. Therefore inheritance tax is only payable on the net value inherited. Of course it may be that the bank have an insurance policy assigned to them which will clear the loan on death. This means the full value of the property will be inherited and full tax payable. The alternative would be that the beneficiaries have a loan on the property on which the payments will need to be maintained and the borrowing ultimately settled by the executor of the estate.

4. Joint ownership of the property with your children/beneficiary means they do not need to pay IHT.
Passing ownership of your property to your inheritors has many complications, and one has to consider the implications in respect of gift tax, transfer tax and capital gains tax in both the UK and Spain. Furthermore it is not advisable to dispose of your assets until you have completely finished using the benefit. If you transfer part of the asset probate will still be required on any balance you retain.

A second complication of using this tactic is that the asset could be at risk should there be a marital or financial issue with one of your co owners and of course it is always possible that a son or daughter could predecease their parents which would mean the parents would be at risk of losing control of part of their asset depending on the Will or marital status of the deceased person.

Wincham Consultants offers owners or prospective buyers of Spanish property legal and Taxation advice to structure the ownership of their Spanish property to significantly limit themselves and their Beneficiaries from Spanish inheritance tax liabilities and avoid acquiring an illegal or encumbered property.

Whether you currently own a property in Spain, are about to purchase one or own the property in an offshore or Spanish SL Company, Wincham Consultants have a solution and method to help to transfer your property into a UK Limited Company to avoid Inheritance Tax in Spain.

Not only have Wincham, market leaders in the provision of Consultancy Services in respect of corporate ownership of Spanish property, been operating in Spain for almost 20 years, but we own a portfolio of properties using the UK Company structure which we advocate our Clients use.

Our team of qualified professionals includes UK Lawyers, Tax Consultants, Chartered Accountants, Gestores (Qualified legal Assistants), Economistas, Abogados, (Spanish Lawyers) and Notary Public.

Offering a full legal service in the UK and Spain, specialising in property, Wills, probate and company sale and purchase we also provide –

Taxation services – advising clients on income tax, capital gains tax, inheritance tax and purchase tax in both Spain and the UK.

Accountancy services – providing corporate clients book keeping, final account preparation and the submission to both HMRC and the Spanish hacienda where applicable. We are also able to provide personal Taxation services in both the UK and Spain

Company secretarial services – to include the provision of registered office, the filing of annual returns, maintaining statutory books, dealing with share transfers and company formations.

The company holds a money laundering licence issued by HMRC and Professional Indemnity Insurance.

Priding ourselves on a professional, friendly and informative service, you will always receive communications in your native language wherever possible and undertake to respond to enquiries in a prompt and courteous manner

Contact Wincham for Help & Advice

If you would like to understand your Tax implications in Spain and receive our free Spanish Inheritance Tax illustration then please contact one of our Consultants on +44 (0)1260 299 700 (UK) or 0034 965 830 991 (Spain) or visit our website www.winchamiht.com. Our Consultants can also explain some of the other benefits of moving your property into a UK Company today. With Spanish taxation on the increase there are many benefits to restructuring your assets now, saving you and your beneficiaries, money in the future.

Providing solutions to your problems.

Spanish Taxes on the Increase

Wincham has received almost 1500 enquires in the past 12 months from owners of Spanish property who are concerned about Spanish Inheritance and Taxes in Spain.

Over 95% of these owners have spoken with one of our Spanish Tax Consultants and have received our free illustration and proposal demonstrating the potential Spanish Inheritance Taxes they or their Beneficiaries will face upon death. Within our proposal we supply details of the process and of owning a property in Spain in a UK Limited Company structure which help avoid Taxes in Spain.

Many of our clients tell us that they have been advised by other professionals that Spanish taxation is likely to decrease in coming years and that Inheritance Tax should not be an issue. However, this may not be the case, as the new Spanish Government try to bring financial stability to the Country.

Capital Gains Tax (CGT)

From January the 1st 2012 CGT for non-resident property owners in Spain will stand at 21% across the board. This follows a previous rise in 2010 from 18% to 19%. In 2007 the European Union put pressure on Spain to lower the CGT rate of 35% for non- residents (15% for residents) to 18% - deeming it to be an unfair penalty on non-residents. A subsequent rise of 1% in 2010 passed relatively unnoticed but it is now followed by a further 2% increase.

Spanish Residents will also feel the sting with CGT figures rising to 21% up to 6000€, 25% between 6001€ and 24,000€ and 27% on higher figures.

It is very important not to confuse CGT with Inheritance Tax as many people do. CGT is payable on profit made from the sale of assets. Inheritance Tax in Spain is paid by the Beneficiaries of a property on death of an owner.

It should be further noted that UK Residents are obliged to submit a tax return in respect of CGT to HMRC. The current CGT rate in the UK is 28%. Relief against this tax can be claimed in respect of taxes paid in Spain as long as a suitable certificate from the Hacienda (Spanish Tax Office) has been received. The 3% retention retained by the buyer on sale cannot be claimed as relief from UK CGT.

A further potential liability to a UK resident is the capital gain incurred in respect of the exchange rate gain made by the seller. This is calculated based on the exchange rate when the property was purchased against when the property was sold. This can create a CGT liability in the UK, even if the property was sold in Spain without a profit.

Wealth Tax Reintroduced

Wealth Tax is usually charged as part of the annual tax declaration which is submitted by all residents and non-residents of Spain. This is based on the value of your assets held in Spain. Although it had been reduced to zero for a number of years it was reintroduced in late 2011 and will begin to affect those with assets in excess of €700,000.00.

Non Resident Income Tax Increased

From January 2012 Income Tax charged to Non-Resident property owners on the rent they collect in Spain has been increased from 24% to 24.75%.

Spanish Resident Income Tax Increased

Not only are non-residents being taxed higher in Spain but Spanish Resident Income Tax has already increased in 2012 for Higher Rate Tax payers which has risen from 45% to 52%.

Contact Wincham for Help & Advice

If you would like to understand your Tax implications in Spain and receive our free Spanish Inheritance Tax illustration then please contact one of our Consultants on +44 (0)1260 299 700 (UK) or 0034 965 830 991 (Spain) or visit our website www.winchamiht.com. Our Consultants can also explain some of the other benefits of moving your property into a UK Company today. With Spanish taxation on the increase there are many benefits to restructuring your assets now, saving you and your beneficiaries, money in the future.

Capital Gains Tax Hike

Just announced - a second hike in the Capital Gains Tax (CGT) levied on non-residents in as many years.

From January the 1st 2012 CGT for non-resident property owners in Spain will stand at 21% across the board. This follows a previous rise in 2010 from 18% to 19%.

In 2007 the European Union put pressure on Spain to lower the then CGT rate of 35% for non residents (15% for residents) to 18% - deeming it to be an unfair penalty on non-residents. A rise of 1% in 2010 passed relatively unnoticed but shows a worrying trend towards accelerating tax increases to boost the dwindling economy.

Spanish Residents will also feel the sting with figures rising to 21% up to 6000€, 25% between 6001€ and 24000€ and 27% on higher figures.

Call us now for further information on this and other tax changes and how we can help you save money.