Dissolving property holding company

my wife and i own a company whose only asset is a property that was purchased in 2000. we would like to transfer the property into personal ownership and liquidate the company. the property was purchased for about 400,000 euros in 2000. we would like to know what is the most cost effective way to dissolve the company and have the following questions: i) there is a share capital deficit in the accounts as a result of the the"losses" incurred over the years. loan interest has been included in the accounts. would we have to increase the share capital prior to dissolution to avoid the risk of a 7% transfer tax being applied due to the tax office seeing it as an exchange of the property for the loan. or this a very low risk and there is no need to increase the share capital. ii) we would like to know all of the costs associated with the liquidation of the company: notary fees, land registry, mercentile registry, legal fees. presumably the 1% tax would be due? iii) if we have to increase the share capital , what are the specific costs associated with that? many thanks for your help

Hello Kerry

I don’t have all the details regarding the company you own and wish to liquidate but I can advise you of the following:

• The applicable tax would be of 1% of the market value of the property (TPO-OS) when the company is dissolved, provided there is no “profit” made (which would happen if there was increase in the market value from 2000 to 2009). The Tax Office can determine if this is case although it rarely done.
  
• The value of the property is taken fully, irrespective of any debts or loans attached to it.
  
• You would not need to increase the share capital as the liquidation takes into account not only the share capital but also the value of the assets which are being adjudicated.

The procedures for liquidating will include the preparation of an inventory following the formalities envisaged in the Spanish Limited Liability Company Act and a final balance. These documents have then to be notarized by means of a deed of liquidation and adjudication of Spanish LLC.

Costs are likely to include 1% Stamp Duty (400k Euros), Notary and Companies House fees (1,500 Euros approx.), Land registry (800 Euros) and legal fees (approx. 2,800 Euros).