Inheritance tax issue for spanish property

by **oldchurch** on Sun May 03, 2009 10:43 am

Hi,

Can anyone please give me some advice regarding this issue.

My father owns a villa in spain no mortgage and wants to leave it to me,property value circa €300,000 in a good market.
I have been reading about the IHT in spain and it sounds like a nightmare.

Is there any way of avoiding any massive tax bill either by signing over the property now while he is still alive or by moving it to a ltd company type scenario as i have read on some other web sites.

I would appreciate any good sound advice so i can react to what will eventually leave me with propety in spain regardless of wanting it or not.

Rgds...

Kelvin.

by **Lee Young** on Sun May 03, 2009 8:22 pm

Where is your father domiciled - where does he live?

by **oldchurch** on Mon May 04, 2009 11:25 am

Hi,

He is uk born with no ties to the uk with regards to property or bank accounts.

He is resident in spain 100 % with all banking & utilities ect.

Do you have any sound advice ?

Rgds...

by **Peter D** on Mon May 04, 2009 3:57 pm

May I ask where your mother is and what is the 'total' value of his estate. I assume he lives inthe property. Regards Peter

by **oldchurch** on Mon May 04, 2009 9:51 pm

He is divorced and there is no claim from his ex wife on his estate.
He lives in the property and is planning to stay there until the end if possible...

by **oldchurch** on Mon May 04, 2009 9:53 pm

Total estate is worth aprox €300,00

by **Lee Young** on Tue May 05, 2009 11:21 am

Assuming he moved to Spain more than three years ago and the UK revenue accepts he is domiciled there, then UK IHT is not an issue. Nor is UK CGT as he is resident in Spain. Therefore you need to find out what the Spanish tax liabilities will be on his death and on any gift. Not something I can answer I am afraid.

by **oldchurch** on Tue May 05, 2009 12:51 pm

He has lived there for 10 yrs now and has no ties to the uk so will have no CGT as this is his sole residence in spain.

I know what the IHT will be on his estate in spain thats why i asked the question in the first topic.

I was mearly asking if anyone had any advice on if the property would be less taxable on his death if it was either gifted or signed over in a ltd company scenario??

by **Peter D** on Tue May 05, 2009 4:09 pm

Use the search engine and find Juan Carlos a Spanish tax professional. Regards Peter

by **oldchurch** on Tue May 05, 2009 6:33 pm

Have now spoken to a company called winchen consultancy regarding this matter and they advice to put the property in to a ltd company in the UK to avoid IHT in spain and then the property will be taxed in the uk when sold.