By Malini Peñalva, Spanish Abogada at Del Canto Chambers Ibiza
IT is common in Spain for foreign non-residents to grant Power of Attorney to legal firms so that lawyers can deal with matters on behalf of their clients when they are not in Spain.
A Power of Attorney will often be the most practical way of enabling a Spanish lawyer to undertake tasks and sign documents on behalf of their clients so that they do not have the expense and the inconvenience of having to attend in person to sign or authorise each part of a legal matter.
Spanish Wills and Inheritance Tax are both important considerations if you have property and/ or investments in the country. It is normally recommended that you draft a Spanish Will to cover assets located in Spain and a foreign Will to cover any assets in other countries. It is important that there are no legal or tax conflicts between the application of the Spanish Will and the international Will.
If you own property in Spain, or if your beneficiaries reside in Spain, then you will be liable for inheritance or succession tax. The main difference between UK and Spanish inheritance tax is that there is no exemption between husband and wife. When one dies, the other is liable for inheritance tax on worldwide assets. A surviving spouse may be left a `life interest´ in the property instead. If you are UK domiciled you are liable to pay tax in both countries, but these liabilities can be offset against each other. An offshore trust can mitigate inheritance tax and further protect your assets.
It is not uncommon for people who have a property in Spain to also want to purchase and own a boat to take advantage of the beautiful sea. However, buying a boat in Spain requires understanding many complicated tax laws.
For non-residents in Spain, there is a route to avoid the payment of these taxes, but it is dependent on whether the purchaser is an EU resident or from outside the EU. Under the scheme called ‘matricula turística’, a non-Spanish resident from another EU country will benefit from an exemption on the matriculation tax, therefore avoiding the extra 12%, although VAT must be paid. If the buyer is from outside the EU, the total amount (both the matriculation tax and VAT) will be exempt.
Who is buying or selling the boat can also make a difference regarding the amount of tax to be paid.
If there is a professional agent/ intermediary acting on behalf of the buyer/seller in the boat Transaction, then the tax liability may differ. If the transaction takes place between two individuals, but the buyer is non-resident in Spain, the transaction will be tax-exempt in Spain. With such complicated tax implications, it is important to seek advice before buying or selling a boat in Spain.
Del Canto Chambers has a team of expert lawyers who are dual-qualified in the UK and in Spain, meaning we are perfectly positioned to support our clients with any legal or tax requirements. We help ensure you are fully compliant with your tax position, helping you plan and protect your income as best as possible.
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To make a no-obligation enquiry, please either call Del Canto Chambers now on: +44 2070 430648 or complete our online form on our website’s contact page, which after receipt we will come back to you within 24 hours.