It is certainly the case that Spanish tax law is evolving to keep up with European law, but not without a struggle. We appear to have reached a level playing field, whereby the liability of everyone to Spanish inheritance tax and Spanish gift tax is applied equally, irrespective of the country of origin, or the country of residence of the person liable to the tax. However, this has taken some 22 years to achieve.
Fortunately, over the course of the past seven years the development of the succession and tax rules applicable to Spanish estates favours UK nationals, in both a leave and remain scenario, whether in respect of the UK remaining in the EU, or Scotland remaining in the UK. The administration of the Spanish elements of a Scots estate need not be complex, provided it is approached logically and methodically, like any other aspect of a death estate.
The first issue with which to grapple in the administration of a Spanish estate is the documentation that is required, including documents issued in Scotland and those prepared and issued in Spain. The next phase is to determine the succession law applicable to the estate and the liability of the beneficiaries to Spanish tax. We strive towards a timely realisation of the Spanish estate assets, although beware that it is an art rather than a science, and not for the fainthearted.
Over the past 12 months, the Spanish government has made important changes reducing significantly the cost to consumers of borrowing money secured against Spanish property, and equally important changes to the amount of Spanish inheritance tax and gift tax to be paid in Spain, irrespective of one’s country of residence.
The Camposol development in Murcia, Spain, is an area known to have been plagued by difficulties during the build and in its early years. As the situation has improved and stabilised, British buyers have been tempted by the plentiful supply of property at reasonable prices and so we are seeing more buyers keen to purchase a place in Camposol.
As with any property purchase in Spain, early independent advice is the key to making a successful purchase. However, there are some issues peculiar to the Camposol development that it is important you are aware of before taking the plunge.
As specialists in Spanish succession law we are frequently asked by clients “Do I really need to make a Spanish will?” as it seems that there are a lot of mixed messages about this issue on the Internet. The answer, as with so many legal questions is; “It depends,” but there are a number of compelling reasons why it can benefit you to have a Spanish will in place if you own assets in Spain.
In England & Wales it is impossible for buildings and land to be registered in the name of a minor (someone under 18 years of age according to English law). Instead, property is held in trust for the minor, whereby the legal owner of the property is an adult who holds the beneficial interest in the property for the minor. There may be more than one trustee and more than one beneficial owner. The duties of a trustee in those circumstances are established clearly by law in England & Wales.
Please note that there is more up-to-date information in relation to Brexit. You may find our video on the effect of Brexit for UK nationals throughout the transition period and beyond helpful. We also have a more recent article on living, working and owning property in Spain.
In 2016, immediately following the referendum of 23 June, we considered the possible effects of Brexit on British property owners in Spain, Brits intending to move to Spain, and those thinking about buying property in Spain after Brexit.
We intended, as the negotiations progressed, to write regular updates as the terms for the United Kingdom leaving the European Union were agreed. Since 23 June 2016 we have been watching and waiting. It has been extremely difficult to put anything in writing when the position has remained undefined. We are now in April 2019 and it seems that the Brexit position is no clearer.
While it is an unfortunate certainty that we will all be subject to tax if we own property in Spain, what is uncertain are the different types of taxation and the level of that taxation, depending upon whether the person liable to the tax is resident in the EU, the European Economic Area, or neither. While most people who buy property in Spain are nationals of EU member states, it is also useful to focus on the extent to which those who are not resident in the EU are treated differently from a taxation perspective.
The process, costs and pitfalls of buying a place in Spain have been well documented. However, what follows the purchase receives less attention, despite being equally important. Being a property owner in Spain attracts the same risks and responsibilities as owning property in any other jurisdiction, but there are some quirks that are unique to Spain. Here we guide you through the steps you ought to take and matters you should be aware of when you become a property owner in Spain.
If you own property in Spain and you do not live in Spain you may not be aware that you are liable to pay Spanish non-resident income tax. This is not unusual. Many people own property in Spain for several years without being aware that they must pay non resident income tax.
E&G Solicitors handled our matter brilliantly! The communication was excellent and Cristina was fantastic. We would always use you again. 04/06/2023
