Archive for the ‘Uncategorized’ Category
Tuesday, October 11th, 2011
The Spanish Prime Minister, José Luis Rodríguez Zapatero has confirmed that he will not be leading the Socialist Party to seek a further term in office in the Spanish General Election in November 2011. The current poll indications suggest a shift towards the more conservative PP (Partido Popular or People’s Party).
Whilst the policy of the Socialist Party has been (in national terms) to maintain the impact of Succession Tax, the declared policy of the PP party (if elected) is to take steps in the future to reduce the impact of Succession Tax. It has yet to be seen whether the intention is to retain the current distinction between Spanish residents and non-residents.
As a separate issue, under European legislation, the Spanish Tax Authority’s practice of treating European (but non-Spanish) owners of Spanish properties more onerously than Spanish owners of Spanish properties is certainly questionable.
We are informed that moves are afoot to launch a challenge in respect of this fiscal practice; and if successful, that could have a significant effect on the impact on Succession Tax for foreign owners of Spanish properties.
We will be monitoring this carefully, in order to keep our clients and contacts updated.
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Monday, June 20th, 2011
The Padrón is the list maintained by each Town Hall in Spain, of the people who live in the town in question, irrespective of whether the property in which they live is owned or rented.
Residents in Spain are obliged to register on the Padrón (to be ‘empadronado’). There are a number of legal/ administrative steps which cannot be completed without being on the padrón, eg voting; purchasing a Spanish registered vehicle; and enrolling children in Spanish school.
There are also funding and public services benefits to the town in question of having the Padrón up to date and complete. Also in terms of taxation, registration on the Padrón in some parts of Spain can result in tax reductions, including in relation to the calculation of Spanish Succession Tax.
We therefore recommend to our Spanish resident clients that they ensure that their up to date details are indeed registered on their local Padrón.
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Saturday, January 15th, 2011
The process of buying, selling and inheriting properties in Spain can involve the conversion of substantial sums from Sterling to Euros and/or vice versa. This can be particularly interesting for our British clients.
Clearly, there can be significant variances in the rates given between banks and the best specialist Foreign Exchange (FX) brokers. Consequently, there can be a very substantial hidden cost in this process for individuals who do not give the matter careful thought and attention.
At Legal4 Spain, we have had an arrangement for some years now, with a leading specialist FX broker, so that we can provide the required certification to have an FX facility set up in a matter of minutes. This ensures that the clients we introduce have a fast, secure and top quality FX service; saving substantial sums on each and every FX transaction. The service is available for all major currencies.
We will be happy to provide further details on request.
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Tuesday, November 23rd, 2010
The 3% tax retention on sales of Spanish properties by non-Spanish property owners is, in fact, intended to apply to non- residents. Conversely, Spanish residents who are Spanish taxpayers should not be affected by this retention (but like all sellers, they still have to pay ‘Plus Valia’, the Municipal tax on property sales).
However, there has been a general tightening of the rules and practice guidelines in this area, so great care is needed to ensure that Spanish residents do not fall into the ‘trap’ of losing 3% of the proceeds of their Spanish property sale. The reclaim process in applicable cases, is very lengthy and convoluted, so many sellers end up simply ‘writing off’ the 3%, even though really they should be entitled to it.
To explain, Spanish residency has two component elements. The first is legal or factual residency (generally evidenced by a Certificate of Residency). However, of equal importance, the positive step must also be taken to become fiscally resident in Spain; and annually to file the corresponding tax declaration in Spain.
Provided that the fiscal obligations have been complied with when a property sale is agreed, the Spanish Tax Authority should issue a Certificate of Fiscal Residency. This, combined with the Certificate of Residency, should satisfy the Notary and the Spanish Authorities that no 3% tax retention should be made (although a later tax assessment can be made in relation to the sale, depending on the facts and figures of the case in question).
We have seen many cases where people have ‘taken residencia’ (i.e. obtained Certificates of Residency); but have not taken the further step of becoming fiscally resident in Spain. It has therefore come as an unpleasant surprise to them that on the sale of their Spanish property (even a sale at a loss), 3% of the sale price goes to the Spanish Tax Authority.
At Legal4Spain, we can provide you with guidance on these Spanish tax requirements. We can deal with the legal and fiscal process of property sales, to ensure legal correctness and fiscal efficiency.
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Monday, September 20th, 2010
No, that is not correct.
Wills and probate are not the same at all- each serves a quite distinct function. A Will is the document in which you appoint your beneficiaries (i.e. to whom you wish to leave your assets in the event of your death). Probate is the legal succession process through which beneficiaries receive the assets to which they are entitled.
Probate may therefore be required irrespective of whether or not there is a Will, depending on the assets in question; and the circumstances of the case.
In the case of Spanish assets, it is almost always necessary to go through the Spanish legal equivalent of the probate process. The importance of leaving a Spanish Will is not to avoid probate, but more importantly, to ensure certainty as to who is entitled to your Spanish assets in the event of your death. Also, a Spanish Will helps to ensure that the probate/ succession process in Spain is as straightforward, quick and economical for your chosen beneficiaries as possible. If no Spanish Will is left, or only a Will in another jurisdiction (e.g. an English Will) the Spanish probate/ succession process can be much more complex, lengthy and as a consequence, more expensive than is necessary.
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Thursday, August 19th, 2010
Many of you may have viewed a recent high profile BBC television programme, Panorama. This highlighted concerns about the levels of professionalism and regulation of will writing and probate services under English law, with (amongst other problems) instances of cheap Wills that were being offered with escalating hidden costs.
This current state of affairs has pointed out that it is equally (possibly even more) important, that you make the same enquiries of your Spanish legal adviser, as you would make of professional advisers in your own country. This is expressly why we work with individuals who have a professional background (see “Our Team“). This experience together with suitable qualifications, are matters which have always been extremely important to us at Legal4Spain.
The professional body to which we are accountable in the UK, is The Society of Will Writers and Estate Planning Practitioners (www.willwriters.com). Also, the Spanish lawyers handling our Spanish legal cases are fully qualified and highly experienced in Spanish legal matters- accountable to; regulated by; and professionally insured through their own professional body in Spain. In addition, every single Spanish legal document we provide for execution in Spain is specifically approved by an authorising Notary- and in the case of Wills, also accepted by the Central Wills Registry in Madrid. As such, the level of accountability and professional protection afforded to our clients is second to none.
It is essential, if you are not a Spanish national but have assets in Spain, that
the legal advice you receive is from legal professionals who are appropriately qualified and experienced in Spain. Equally important, your Spanish legal professionals must also have the necessary qualification and experience of such matters in your country of origin. Otherwise, it is impossible for you to be confident that your legal position and responsibilities in Spain are correctly ‘dovetailed’ with your legal position and responsibilities in your country of origin. Getting it wrong by not having proper professional advice, could end up being very costly for you and your family. Do not overlook the fact that before confirming instructions in any Spanish legal matter, you should be certain that you are completely clear about all applicable charges and costs; and further, you need to ensure that any client monies will be securely held on your behalf, in a designated client account.
At Legal4Spain, we are more than happy to give our clients the comfort they need on all these matters, as we are dedicated professionals, committed to 100% client satisfaction.
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Thursday, May 20th, 2010
It is customary in English Wills to include wishes as to plans for funerals.
There isn’t the same custom in Spanish Wills. Instead, arrangements are fairly standardized. Cremation is the usual method; and this usually takes place extremely quickly- between 24 and 48 hours from the time of death. If someone should include funeral wishes in their Will, this is of limited use, as not only are such provisions non-legally binding; but in many cases, the Will isn’t even looked at until quite some time after the funeral has actually taken place.
There is no doubt that arrangements move quickly for those who pass away in Spain. On top of this, the comparatively high costs of the process in Spain can also come as quite a shock. For this reason, we recommend that those spending significant periods in Spain give consideration to wishes regarding funeral arrangements. Furthermore, that these wishes are embodied in a formal pre-paid plan with a reputable provider. At Legal4Spain, we are able to make recommendations and manage the process of formalizing a funeral plan for you, based on identifying the best service available for your specific needs.
For some, this is a difficult subject to think about, but it can be a huge relief to have it dealt with, and ‘out of the way’. Once you assume the responsibility for leaving a situation of certainty, and without financial worry, this can make a big difference for the family and loved ones who are left behind.
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Wednesday, April 21st, 2010
Not in its existing format. But …
There is a specific format for this type of document which is acceptable in Spain, which extends a standard Power of Attorney to the closest available equivalent to a UK Lasting Power of Attorney. At Legal4 Spain, we are able to provide this form of Power of Attorney for signature both within Spain and outside Spain.
There are various legal and procedural differences between Spain and other countries in relation to Powers of Attorney. Therefore, at Legal4Spain, our advice is that the only way to avoid problems, delays and additional costs, is for an individual Power of Attorney to be made in relation to Spanish assets, in a form which is immediately acceptable and admissible by the Spanish Authorities. This can be an extremely useful and valuable facility for anyone who owns property in Spain, to cover the eventuality that they are unable to deal with their affairs in Spain at any future time, due to either physical or mental incapacity.
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Wednesday, February 10th, 2010
Many would say that this is impossible. HOWEVER that is not entirely correct.
It is the case that Spanish law does not directly recognise the UK / US form of trusteeship. HOWEVER, it is a well established feature of Spanish estate planning that life interests can be created (also in Wills) to assist in tax planning and mitigating tax exposure. Also, there are some very specific structures which can be created to include Spanish properties in either quasi- trust or full trust arrangements. This is a fairly advanced area of estate planning, and would not ordinarily be viable in relation to ‘routine’ situations of Spanish property ownership.
At Legal4 Spain, it is essential that clients are advised on their specific situation. We look at each client case on its individual merits and propose the documentation or structure which we feel best fits the objectives of the individual client, in the most cost effective way.
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Thursday, December 17th, 2009
At Legal4spain, we have facilities for making valid Wills of Spanish assets for as long as the signatory has the necessary mental capacity, irrespective of physical state of health and location. Clearly, it is always best to plan ahead. However, in some cases we are approached by clients facing terminal illness, who quickly wish to put their affairs in order. It is a great relief and comfort to them and to their families, under these difficult circumstances, to ensure that their wishes in respect of their beloved Spanish properties will be carried out. Also, there are opportunities in many cases to structure arrangements, so as legally and legitimately to minimize the family’s Spanish Succession Tax liability.
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