This topic contains 4 replies, has 4 voices, and was last updated by Mark Roach – Spanish Tax Consultant & UK Limited Company Director 1 year, 5 months ago.
January 3, 2017 at 5:12 pm #194164
Hello, my semi-detached house in Mallorca is owned by a S.L, set up prior to purchase (2003). I rent out some months yearly and my husband and I use it ourselves in between. Is there a ‘user fee’ to pay when we stay at the house?
Inger F C
January 8, 2017 at 1:18 pm #194225
Excuse my ignorance .. what is a S.L.?
Wouldn’t it be easier to ask the S.L.?
January 8, 2017 at 5:40 pm #194231
Is your SL is a Spanish company which you own? In which case why not pay the rent to the SL and draw out as Director’s fees? You actually don’ give enough information for anyone to comment.
January 8, 2017 at 5:44 pm #194232
Maybe you should have set up an offshore company to buy the property. This might have enabled you to be more flexible? You might have left it too late to manoeuvre now, but I would welcome A.N.Others opinion on the tax impacts here.
January 10, 2017 at 9:16 pm #194262
I will qualify for you.
1: If the Mallorca property owned by your Spanish SL Company is your main place of Residence / Home then yes you will pay Benefit in Kind Tax.
2: If the SL Company is an investment Company and not your main home then you have Spanish Inheritance Tax to consider, as your Beneficiaries will have Spanish Inheritance Tax to pay when they inherit the Spanish SL Company with the property within it.
3: If you own a Spanish property within an Off-Shore Company like, Gibraltar, Isle of Man, Jersey, Guernsey, etc , then the Spain Tax Office will Tax the Off-Shore Company 3% a year on the value of the Spanish property, so very expensive annual Spain Tax to pay.
4a: If you look to place your Spanish property into a UK Limited Company structure from your SL Company or personal names, as an investment then there is no Spain Property Transfer Tax of 8-10% when doing this.
4b: A UK Limited Company that owns Spanish property does not have the annual 3% Off-Shore Company Tax.
4c: Spanish Inheritance Tax is then removed if the property is owned within a UK Limited Company.
4d: During the UK Budget of 2008 the UK Tax office removed the Benefit in Kind Tax for Directors of UK Companies that own overseas Investment property as they are making it more Tax Efficient to use UK Companies abroad.
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