Transfering property ownership into a UK company

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Petter
Posts: 62
Joined: Thu Apr 21, 2016 9:44 am

Transfering property ownership into a UK company

Postby Petter » Fri Apr 22, 2016 2:14 pm

By forming a UK Company: The owner of the property forms a UK Limited Liability company, in which ownership of the property passes into the hands of the company. In this way when he or she passes away, the company will be reorganised, that means it will only be necessary to transfer some company shares, which falls outside Spanish inheritance tax. Is this true :P



admin
Site Admin
Posts: 27
Joined: Fri Apr 15, 2016 3:51 pm

Re: Transfering property ownership into a UK company

Postby admin » Fri Apr 22, 2016 2:17 pm

This is indeed true and can be done but 2 things come to mind immediately:

If the UK company shareholders are not tax residents in the UK they may fall foul of the Spanish 3% special tax on the cadastre value (impuesto especial sobre inmuebles de entidades no residentes). This tax is paid yearly and on an average property worth for the Town Hall (according to the IBI receipt) 200,000 Euros the tax would be 6 thousand Euros per annum.
If the Inland Revenue decides to intervene in the transfer of shares after death this may have an impact on IHT in the UK, although expert advice on UK jurisdiction will have to be sought in this respect.

If the above causes concerns it may be wise to consider perhaps a Spanish Limited Liability company as it is possible, in practice, to not have to transfer shares if the director of the company is a third party with the ability manage the company.

Daniel98
Posts: 16
Joined: Thu Apr 21, 2016 3:28 pm

Re: Transfering property ownership into a UK company

Postby Daniel98 » Fri Apr 22, 2016 2:17 pm

Hi,

I have just made a Post to this Forum in the Tax section which may be of interest to you headed "How To Safeguard Against Spanish Inheritance Tax"

My Corporate Property Ownership Consultant who is located in the UK & Spain helped me purchase my property in Spain using a UK Limited Company, so I can pass on their details to you if you wish. I also know they give correct advice and the method for this procedure even if you already own in your own name.

aflores comment above about the 3% Tax I think you will find out to be inaccurate as that Tax in Spain is only charged to Offshore Companies, like the Isle of Man, and not UK Limited Companies which may only be Taxed in the UK, not Spain, also the Shareholders do not pay any Taxes to the Spanish authorities either.

The British Government allow Shares in a UK Limited Company to be passed on to the Beneficiaries Tax Free as well, and you only require a Will in the UK and not a Will in Spain.

The solution of owning in a UK Limited Company completely removes Taxation in Spain, whereas owning in your own name, a Spanish (SL) Company or an Offshore Company does not.

Please let me know if you would like my Consultants details or any information on this subject as I can discuss it from first hand experience.


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