Property owners in Spain hoping to provide some security for their children or spouses after their deaths could be leaving them a financial headache instead according to a Corporate property ownership specialist.
“Non-domiciled property owners in Spain are sitting on a ticking IHT time bomb,” said Mark Roach of Wincham Investments. “Most owners do not understand that their heirs and their estate may pay IHT in two jurisdictions, Spain and their country of domicile. In Spain, the individual inheritor is taxed whereas in other countries it is the estate that is taxed. This could mean that on the death of an owner the surviving partner, or the owner’s beneficiaries, could have a tax bill that virtually wipes out the entire Spanish inheritance. Added to this is the cost of probate in both countries too.”
“Shares in the UK company can be dealt with in a UK will and, depending on the structure of the company, the shares may be exempt from Inheritance Tax in the UK. A further advantage of the company structure is that attributable expenses such as mortgage interest, council tax bills, water, electricity, repairs and maintenance can all be tax deductable by the company; this may also include car hire and flights for the directors. This is a simple solution costing less than most probate and legal fees in Spain when there is a death of an Owner of the property.”
Anticipating a huge rise in the number of heirs and beneficiaries facing substantial costs, Wincham Investments offers such services through a number of ‘approved consultants’. It is currently offering prospective consultants, or introducers, a three day training course to learn more about this service. “This is an exciting new opportunity to participate in an emerging and growing market introducing a concept that can only benefit and protect clients who are failed time and time again by both Spanish and UK professionals as they are unable to advise on more than one jurisdiction,” Wincham concludes.