GIFTS AND HOLDING COMPANIES: FISCAL ADVANTAGES AND PROCEDURES

Tax Word Cloud ConceptOnce we have made the decision to buy a second home in Spain, we can consider the following issues:

If one of the owners dies, are the procedures difficult? How much tax will the heirs have to pay? There are often cases where the heirs don’t have the means to go through the legal procedures and pay the taxes in their own country, and then again in Spain … and so, what do we do?

We can make two suggestions:

GIFT TO CHILDREN: in some particular circumstances it is advisable to consider a gift as a way of transferring a property free to children, with the specific option of the owner parents retaining lifetime usufruct (right of use). The fiscal advantages of this system in the Canaries are obvious because gifts to children benefit from a 99.9% tax exemption. The lifetime usufruct expires automatically on death, with the heirs simply required to present the Death Certificate to the Land Registry to eliminate the entry granting the right and thereafter to be able freely to dispose of the property. It is important to bear in mind that this option will not be available to British nationals after the UK’s departure from the EU because the exemption is only applicable to EU residents.

PLACE THE PROPERTY IN A SPANISH OR EU HOLDING COMPANY: companies do not die and the transfer shares to heirs is automatic and straightforward. If you own a property in Spain and family members share its use, you may be interested in this system since putting the property into a company in exchange for shares is also exempt from property transfer tax. Once the property is placed into company ownership, shares are issued in favour of each co-owner, who do not have to pay annual taxes simply because they own property, because this form of ownership is not subject to income tax (IRPF).

When carrying out the procedures for either of these options, the window for presentation and payment of taxes need to be borne in mind. Also, the specific tax base must be ascertained in order to draw up a tax return, and the correct forms identified and completed correctly. In addition, a range of documents has to be gathered together, in Spanish, something that is difficult even for Spanish nationals to manage. For all these reasons, before starting the process it is essential to engage a specialist lawyer to be able to assess and pay the appropriate amounts for these taxes.

Spanish version

DONACIONES Y SOCIEDADES PATRIMONIALES: VENTAJAS FISCALES Y TRAMITES

Una vez que hemos tomado la decisión de comprar una segunda vivienda en España, se nos pueden plantear las siguientes dudas:

En caso de fallecimiento de uno de los propietarios, ¿son complicados los trámites? ¿Cuántos impuestos tendrá que pagar el heredero? Son frecuentes los casos en que los herederos no disponen de los recursos necesarios para cumplimentar estos trámites y pagar los impuestos correspondientes en su país y además en España… entonces ¿que hacemos?.

Proponemos 2 soluciones:

1) LA DONACIÓN A LOS HIJOS: en algunos supuestos especiales conviene plantearse la donación como forma de transmitir gratuitamente la propiedad a los hijos, con expresa reserva del usufructo vitalicio (opcional) a favor de los padres. Las ventajas fiscales de este sistema en Canarias es evidente, puesto que la donación a favor de los hijos está exenta al 99,9% del impuesto correspondiente. El usufructo vitalicio se extingue automáticamente al fallecimiento bastando presentar el certificado de defunción en el Registro de la Propiedad para eliminar este derecho y poder disponer de la propiedad libremente. Tenga en cuenta que para los ciudadanos británicos esta opción no estará disponible después de su salida de la Unión Europea, puesto que solo se aplic la exención a residentes en la UE.

2) LA APORTACIÓN DEL INMUEBLE A UNA SOCIEDAD PATRIMONIAL ESPAÑOLA O DE LA UNIÓN EUROPEA: las sociedades no mueren y la transmisión de las acciones a los herederos es automática y sin complicaciones. Si usted es propia eta río de un inmueble en España y comparte su uso con familiares es probable que le interese este sistema puesto que la aportación de la propiedad a cambio de acciones de una sociedad está también exento del impuesto de transmisiones patrimoniales. Una vez aportada a la sociedad se emiten acciones a favor de cada copropietario y no tienen que abonar impuestos anuales por la mera tenencia de inmuebles ya que esta forma de titularidad no está afecta al impuesto de la renta IRPF.

A la hora de realizar los trámites para dar curso a cualquiera de estas opciones hay que tener presente el plazo de presentación y pago del impuesto. Además, es necesario saber cuál es exactamente la base imponible para elaborar una autoliquidación, conocer en qué modelos de formularios hay que presentarla, cumplimentarlos debidamente y, además, reunir una serie de documentos, en idioma español que resulta difícil entender incluso para los nacionales. Por todo ello, ponerse en manos de un abogado especializado , antes de comenzar el proceso, resulta indispensable para poder realizar los pagos de dichos impuestos con las cantidades adecuadas.

Author: J. Escobedo

I am a member of the Tenerife Law Society since 1989 with a dedicated team for anyone who needs an immediate answer or long term solution to any practical or legal issues appertaining to any property or business investment in Spain. If you have decided to move to Spain to start a new life, whether that´s buying a property or a business, then you will definitely need the services of a good Spanish Lawyer who is fully conversant with Spanish protocol and who has a good command of the English language. I am based in the south of Tenerife and I am specialist in Property Law, Inheritance issues and taxes as well as Tenerife and Canarian law and a great deal more. ABOUT MY STAFF All my friendly and professional staff are fluent in English. We have been working for foreign clientes for over 25 years in Tenerife, providing legal advice and litigation services to all our clients investing throughout the whole of Spain and we pride ourselves on providing a high quality service to our clients in the form of clearer communication and advice.

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