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Accountant/Tax Advisor

"Accounting in Spain is dramatically different to that of the UK and it is imperative to seek expert advice. As an International Accounting Practice, KSi Costa Consulting Group can give that expert advice. As we say, "Our experience, your advantage".

JOHN STANBRIDGE BA (Hons) FCCA | view biography
CEO, KSi Costa Consulting Group

How much is inheritance tax in Spain? J. Taylor, London, April 2007 Inheritance tax can be up to 50% of the estate value, depending upon the size of the estate. Remember also that even though there is a double taxation treaty between UK and Spain inheritance tax is the only tax that falls outside of this treaty and the tax is payable in both Spain and UK.

What are the tax implications of renting out a property in Spain? M. Mora, London, April 2007 When you rent a property in Spain you are liable for any tax to be paid on the profit attributed from the rental. You will probably end up paying no more than 20% in tax after deductions have been applied. Unlike the UK you can not offset mortgage interest against the rental income, but other costs, e.g. agency fees, accountancy fees can be offset.

If I sell my Spanish property, is there any Capital Gains tax liability? M. Mora, London, May 2007 There is a Capital Gains Tax liability of 18% of the gain, i.e. the sales price less the purchase price. As a non Spanish tax resident at the point of sale then 5% of the purchase price is withheld as an insurance against the Capital Gains Tax position. The CGT liability of 18% is relatively new, and now applies equally for residents and non-residents alike. Previously, the rate for non-residents was 35% while residents ended up paying 15%.

I have heard of people buying Spanish property through a company. What are the advantages of doing this, and is it expensive? F. Scotland, via email, May 2007 It is possible to mitigate Spanish wealth tax, deemed non resident rental income tax, capital gains tax and inheritance tax through purchasing property in a corporate structure. It is financially feasible if the property in Spain is worth in excess of 400,000 as the costs of the structure and ongoing fees are far outweighed by the tax savings.

We are a couple in our 60s, looking to buy a property in Spain. Should we buy the property in our daughter's name? A. Hackett, Merseyside, May 2007 It is possible to purchase in your daughter's name. If you are going to just use the property as a holiday home then this is a smart way of investment as there will be no succession tax upon your death. However, be careful if you are going to reside permanently there as a life interest may be deemed which could bring additional taxes. At this point please take further advice.

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