Inheritance on partner’s death

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This topic contains 8 replies, has 6 voices, and was last updated by Profile photo of Anonymous Anonymous 7 years, 3 months ago.

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  • #55155
    Profile photo of Anonymous
    Anonymous
    Participant

    I’ve had a look through the site but can’t find what I’m looking for so, sorry but can anyone tell me if a buyer can still register a property in a company name in Spain to get around the problems when a spouse or partner dies in Spain if it’s registered in their names?
    I’m talking about as a resident in Spain, not a holiday home.

    I’ve seen somewhere that there are people out there supposedly providing a service to do this for you but just checking with the UK taxman it seems there’s still nothing to prevent you setting up a company here yourself in England with this future purpose in mind.
    Doesn’t seem to matter if you “trade” under that name or not either.

    Secondly, is the Black Money problem still a problem or is it still rife, even these days?

    Thanks.

    Bye the way, I’d like to give my best wishes to Charlie too. Didn’t see the post until just now.

    stevmk2

  • #93839
    Profile photo of Anonymous
    Anonymous
    Participant
  • #93840
    Profile photo of Inez
    Inez
    Participant

    Hi Steve, yes you can purchase a UK ltd company and have the property in that name. The Spanish do not recognize shares as taxable, only assets.

    If the property has already been purchased, then you would have set up costs for transferal into the company name. Also if there is a mortgage then you could not do this without setting up a Spanish SL as well, which would probably defeat the purpose of the exercise.

    If its a new property and can be purchased cash or with UK financing, then just the ltd co is sufficient.

    Its usually just a holding company but it doesnt matter what you do with it as its not in Spanish jurisdiction. The shares are granted or willed to whoever you want to or can be sold of course with no liability.

    Re black money, some buyers are still offering it and some sellers are still accepting. Some lawyers are ok with it some arent and same with notaries but the envelope is handed over on the qt.

    Hope that helps!

  • #93841
    Profile photo of DrRobert
    DrRobert
    Participant

    Inez,

    That has to be the most succint explanation of the IHT sitiation I’ve ever seen! Some companies have been charging fortunes for what you’ve just explained in ten lines! Well done!

  • #93842
    Profile photo of Inez
    Inez
    Participant

    Thanks for that – its too hot to ramble on and funnily enough I was actually reading an article about it yesterday and trying to helping a neighbour of mine who is in a terrible state as their lawyer did not advise them about this, they bought a few years ago, 2nd marriage, he passed on last year and in the will left 5% of the estate to grandchildren from his 1st marriage!

    Big problem here is the spouse is taxed on the VALUE of the half left to them, there is no straight transfer and my friend is left in the situation she doesnt own the property, she has to pay out the grandkids, none of them have NIE numbers and due to the awkwardness of the 2nd marriage issue arent exactly helpful! She is close to losing the home, so its vital this is looked at sooner rather than later.

    I dont know why people arent advised of this when buying……….hang on, yes I do……..!

    After death accounts and assets are frozen too so be aware of that.

  • #93845
    Profile photo of Anonymous
    Anonymous
    Participant

    Just to second what Inez says. It is actually quite straightforward to do this, especially if you are used to the paperwork associated with setting up/running a UK limited company. You can simply buy a company “off the shelf”, and it can remain “dormant” until you need it for the property. All you have to do is file the annual return at Companies House online. You do not even have to file a UK Tax return for it until after you “activate” it. You do need to tell the tax people it exists (though these days they will probably contact you within a few weeks of formation anyway). If you only use the company to hold the property and do not otherwise “trade” with it, there would not normally be any regular tax liability. There would be CGT when you dispose of the property (if at a profit, of course), but you can make various deductions from this. Keep a careful accounting of ALL expenditures on maintenance, purchase costs, etc. These may be off-set against CGT.

    Andy

  • #93853
    Profile photo of DrRobert
    DrRobert
    Participant

    Does it make any difference if you are resident or non-resident?

  • #93854
    Profile photo of Anonymous
    Anonymous
    Participant

    No.

    All you – personally – “own” are shares in a company. You do not own the property in any personal capacity whatsoever. The company does.

    A Limited Company is a distinct, separate legal entity from its directors/shareholders. Maybe you own 50/50 shares of the company with your wife or partner. The issued share capital may be just a few hundred pounds. You can transfer your shares to anyone you like, or you can sell them. That transaction does not mean THE HOUSE has changed hands – it hasn’t. Ownership remains with the company. No transfer tax, etc. is due.

    You can also leave your shares in a will to someone. Although control of the company gives, in real terms, control of the house, it is not the same thing legally as transferring the house, because ownership remains unchanged.

    Andy

  • #93903
    Profile photo of Anonymous
    Anonymous
    Participant

    My partner and I bought an apartment in Spain. At the moment we only use it for holidays.
    We have a Spanish will which gives all to the survivor and then passes on to the 3 children – 2 of mine and 1 of hers equally.

    We have now married.
    What should we now do so each one of us is protected from Inheritance tax if the other dies?
    should we set up a ltd company?

    Any advice would be most welcome.

    thanks

    dd

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