# Inheritance tax



## slatts (Sep 17, 2013)

I have been told if you set up a UK based Ltd Company you can put your Spanish property on it as an asset and therefore avoid inheritance tax. This seems to simple a solution. Any thoughts / views / advice


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## Simon22 (May 22, 2015)

slatts said:


> I have been told if you set up a UK based Ltd Company you can put your Spanish property on it as an asset and therefore avoid inheritance tax. This seems to simple a solution. Any thoughts / views / advice


Was this an English or Spanish solicitor who told you this?


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## Alcalaina (Aug 6, 2010)

"Solution"? You think tax avoidance is OK then? I hope you never use any Spanish public services!


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## The Skipper (Nov 26, 2014)

slatts said:


> I have been told if you set up a UK based Ltd Company you can put your Spanish property on it as an asset and therefore avoid inheritance tax. This seems to simple a solution. Any thoughts / views / advice


Unless you are buying a very expensive property the costs of setting up and administering a UK limited company can outweigh the tax benefits. My accountants advised against it. There is a company in Spain that advocates this arrangement in newspaper advertisements but I was advised to be very wary of them!


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## Desiato (Jun 1, 2015)

According to this site, no.

Is it possible to avoid paying Inheritance Tax in Spain?


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## slatts (Sep 17, 2013)

Alcalaina said:


> "Solution"? You think tax avoidance is OK then? I hope you never use any Spanish public services!


I can assure you that I have never avoided tax. I am asking a question as one of my neighbours alleges he has done this and I am curious as I said in my oroginal post. It seems too easy


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## Alcalaina (Aug 6, 2010)

slatts said:


> I can assure you that I have never avoided tax. I am asking a question as one of my neighbours alleges he has done this and I am curious as I said in my oroginal post. It seems too easy


Glad to hear it. But in your original post you asked for advice. Is that is so you can advise your neighbour retrospectively?


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## slatts (Sep 17, 2013)

Yes as he is a bit of a know all doesn't want to contribute to either the UK or Spain


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## chrisnation (Mar 2, 2009)

And is it true, as I read somewhere, that pensioners are exempt CGT?


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## chrisnation (Mar 2, 2009)

slatts said:


> Yes as he is a bit of a know all doesn't want to contribute to either the UK or Spain





chrisnation said:


> And is it true, as I read somewhere, that pensioners are exempt CGT?


CGT on principle residence, that is


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## Evilbungle (Jul 8, 2016)

slatts said:


> Yes as he is a bit of a know all doesn't want to contribute to either the UK or Spain


I was about to back you up saying there is nothing wrong with avoiding tax but now I think that will mean me sticking my head above the parapet alone ... so nothing to see here!

In fact, forget it. I'm not smart enough to keep my mouth shut. There is nothing wrong with reducing your tax liability as much as possible, I always reduce my liability as much as I can - to be honest this has so far only extended to putting savings into an ISA but that is because I don't have much to reduce on, but to suggest that because you have a legal way to reduce tax on something means you should never use any public services which you have more than likely paid for several times over is rediculous. 

I aim to pay as little inheritence tax as possible and to do it prefectly legally so why not? but I will make a deal with you, after I have paid as little IT as possible I will from that point forward never use a public service again!


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## Rabbitcat (Aug 31, 2014)

It's that old chestnut again tax avoidance versus tax evasion- very different animals


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## The Skipper (Nov 26, 2014)

Evilbungle said:


> I was about to back you up saying there is nothing wrong with avoiding tax but now I think that will mean me sticking my head above the parapet alone ... so nothing to see here!
> 
> In fact, forget it. I'm not smart enough to keep my mouth shut. There is nothing wrong with reducing your tax liability as much as possible, I always reduce my liability as much as I can - to be honest this has so far only extended to putting savings into an ISA but that is because I don't have much to reduce on, but to suggest that because you have a legal way to reduce tax on something means you should never use any public services which you have more than likely paid for several times over is rediculous.
> 
> I aim to pay as little inheritence tax as possible and to do it prefectly legally so why not? but I will make a deal with you, after I have paid as little IT as possible I will from that point forward never use a public service again!


A UK ISA is not, of course, tax free if you are a fiscal resident of Spain!


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## Evilbungle (Jul 8, 2016)

According to HMRC the isa remains tax free but you are not permitted to add funds to it whilst resident outside the UK.


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## snikpoh (Nov 19, 2007)

Evilbungle said:


> According to HMRC the isa remains tax free but you are not permitted to add funds to it whilst resident outside the UK.


The reason it's NOT tax free is that you will/may have to pay tax on it in Spain.

Yes, it's tax free as far as the UK is concerned but Spain have a very different view.


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## Evilbungle (Jul 8, 2016)

The operative word there is "may", tax is complicated, that's why I have accountants. The advice they have given (Spanish and English accountants agreed with tax authorities) is that I will not need to pay tax as I will not be earning interest, adding any money to it or withdrawing from it. As I am not an accountant I will have to trust their knowledge as greater than my own on this. 

And just to make myself more hated as a tax dodger - I'm not paying social security either!


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## snikpoh (Nov 19, 2007)

Evilbungle said:


> The operative word there is "may", tax is complicated, that's why I have accountants. The advice they have given (Spanish and English accountants agreed with tax authorities) is that I will not need to pay tax as I will not be earning interest, adding any money to it or withdrawing from it. As I am not an accountant I will have to trust their knowledge as greater than my own on this.
> 
> And just to make myself more hated as a tax dodger - I'm not paying social security either!


As Social Security is NOT a tax, what's the issue there?


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## st3v3y (Aug 27, 2015)

Evilbungle said:


> I was about to back you up saying there is nothing wrong with avoiding tax but now I think that will mean me sticking my head above the parapet alone ... so nothing to see here!
> 
> In fact, forget it. I'm not smart enough to keep my mouth shut. There is nothing wrong with reducing your tax liability as much as possible, I always reduce my liability as much as I can - to be honest this has so far only extended to putting savings into an ISA but that is because I don't have much to reduce on, but to suggest that because you have a legal way to reduce tax on something means you should never use any public services which you have more than likely paid for several times over is rediculous.
> 
> I aim to pay as little inheritence tax as possible and to do it prefectly legally so why not? but I will make a deal with you, after I have paid as little IT as possible I will from that point forward never use a public service again!


It never ceases to amaze me that tax avoidance is looked at as something so wicked that the subject itself needs avoiding.

As Rabbit says, here we go again and yeah, here we go again. There is a very real difference with tax avoidance and tax evasion. There is nothing wrong with avoiding tax providing that the way in which you choose to avoid it is within the boundaries set by the law. Only a fool would ever consider evasion but that person may well already be the wrong side of other lines too I guess.

Either way, it is a fact that trying to legally reduce ones tax liability is absolutely fine and if someone is paying too much/getting overcharged by HMRC then why shouldn't they do something about it.

If people choose to pay too much tax then that's their prerogative but it's also mine to pay less where possible. And I should be able to make that choice without being judged or vilified.


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