It is hereby informed to the public at large that on the 14/11/2013 the Directorate General for Taxation (DGT), by means of Tax Binding Consultation V3350-13, concluded that a scheme consisting on transferring Spanish property to a UK-based company, with the purpose of avoiding Spanish Inheritance Taxes (IHT), is not legal.
The following statement has been issued by the DGT:
“In relation to the tax scheme consisting in legally transferring a property to a UK-based company, with the sole purpose of avoiding IHT in Spain through relocation of the taxation of the shares of the said company to the UK, there cannot be a favourable response by this Tax Department in relation to the lawfulness of the scheme. Only via the appropriate inspection procedures will the Tax Office be able to establish whether the scheme conforms to the law or, as the case may be, infringe it in which case, the Tax Office will be able to regularize the anomaly by initiating the required procedures to combat tax fraud.”
This publication of this notice is a response to the offering made by a number of service providers (SP), most notably Wincham International Limited, who are promising that Spanish IHT can be legally avoided by transferring a Spanish property into a UK Private Limited company.
Please be advised that until the DGT does not officially rule otherwise, the employment of the above scheme to avoid Spanish IHT could be deemed tax evasion and, where the unpaid tax exceeds €120,000, a criminal offence.
Lawbird Legal Services already warned the public against this scheme twice, in January 2010 and in December 2010. There was no response from Wincham other than a vague statement indicating that over the years, they had attended very happy clients who were successful in avoiding IH taxes…legally.
Finally, please be warned that Wincham are advertising their services/products extensively, offering one-to-one appointments with potential customers in several Costa del Sol venues.