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Spanish property
Key points
- Owning a foreign property through a limited company or other structure has been basic tax planning for many years.
- If obligations have not been complied with might the structure fall within the definition of aggressive tax planning?
- In 1998 the non-resident income tax law introduced a tax liability on property in Spain owned by non-residents.
- Trusts are not recognised in Spain and this may have adverse tax consequences.
- Spanish companies must disclose their beneficial owner in the corporation tax return.
- Tax professionals should review the structures used to buy property to ensure tax compliance.
Over the years to minimise tax liabilities it has been common practice to use international corporate structures to hold Spanish properties. Not surprisingly the average property owned in this way is worth in excess of £1m with many worth more than £5m. International property structures are not cheap to set up and maintain so the potential savings...
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