Tenerife Inheritance Tax
Tenerife Inheritance Tax Saving Scheme for your Tenerife Property
The Wealth Protection Strategy
The purchase of a property here in the sun is an exciting journey to be embarking upon. You will be living a part of your life in a lovely area of the world and we want you to enjoy it as much as we do! We want to make sure that you will not have any nasty surprises along the way and with this in mind we would like to draw your attention to the fact that when you buy a Tenerife property, whether that is through us or not, you will be owning an asset that is subject to different tax rules to those that you are used to in your home country, Tenerife inheritance tax rules are particularly variant.
For a start there is only about €16,000 of tax relief per person available to offset against Tenerife inheritance tax, so between 25% and 50% of your property value could disappear into the Spanish taxman’s pockets when you die; next, if you are buying a second hand property there is a 7% purchase tax to pay as well as about another 2% or 3% in legal and tax costs, so that’s about 10% altogether; thirdly capital gains tax is charged on the profit you make if you sell your property in the future, even if the property is your main home – this is all probably quite different to what you are used to.
Well you can escape these problems by making use of Spanish, EU and UK Tax Law. If you are a citizen of the EU and are looking to buy a Tenerife property for €150,000 or more then you can buy your property using a UK company and thus quite legitimately and legally effectively remove your dream home from taxation in Tenerife and transfer it into the UK corporate tax system which is far friendlier.
You can then remove your Tenerife property’s value from UK inheritance tax using either or both of your personal reliefs of £312,000 and/or by passing the shares of the trading company owning your property tax free to your beneficiaries; the 7% Spanish purchase tax will not apply either and although a 3% capital gains tax retention will be charged if you sell your property in the future it can be totally reclaimed because the transaction will be taxable in the UK and not Tenerife – which means you can make use of some very generous tax reliefs in the UK.
Finally, the cost of buying your Tenerife property using the UK company mechanism will clearly be a lot less than buying as an individual because you will be paying just €8,500 plus about 2% of the property value instead of about 10% of the property value.
Consider a Tenerife Inheritance Tax saving scheme for your Tenerife Property
Please let us introduce you to our wealth protection strategists who will talk you through Tenerife Inheritance Tax and Capital Gains Tax issues in more detail and provide you with a free no obligation illustration so that you can save a lot of money and also keep smiling in the sun with the rest of us. You can easily deal with Inheritance tax issues now and remove the burden from yourself and your beneficiaries.
And finally if your worldwide assets and income are significant and you are therefore paying any tax at all anywhere in the world then the tax strategists may well be able to help you achieve things that your accountant and financial advisers simply cannot.
Please free to contact Expedia Property for more information about this Tenerife Inheritance Tax saving scheme and get advice to develop your own wealth protection strategy.
Alternatively click on the Wincham banner below to be taken directly to the Tax Consultant’s website for a free no obligation assessment.
The same rules apply for all Spanish Property and property assets in the Canary Islands which have the same fiscal system. This is subject to and future revision to Canarian Law