I am about to purchase a UK LTD Company which has a house in it, I have been told that I will not have to pay the 7% transfer fee, my solicitor who was dealing with the purchase prior to my finding out about purchasing a UK Co is not happy with this and says it is against the law and I may be liable in the future, please see part of his letter below:-
(3. - An added risk exists and that is in the case of a Tax Inspection the Spanish Tax Office could think that the structure that you have designed is no less than fraudulent in law to evade the payment of Taxes, thinking that the above mentioned structure is simply created to avoid the payment of the 3 % retention and 7 % of the Transmissions Tax. In this case, the seller would not have any problem, but our clients, would, since not only would they have to pay 7 % (plus interests on delays, sanctions, etc) but also the 3 % retention, as it is the buyer who is obliged to make this payment, and in case of not making payment of this amount, the person responsible is the buyer and the property remains affected by this payment, both the 7% and the 3 %. In addition to the aforementioned, in the case the tax inspection were to examine this matter, such tax inspection could consider the matter was actually tax fraud, which as a consequence could include the initiation of criminal action against the persons that intervened in such operation. Although it may not be very common, there is an existing possibility that it could happen.)
I don't want this to come back at me in years to come, I'm too old for all this already, who is right here, the Company setting up the UK Co or the Spanish solicitor?
Many thanks to someone who can rid me of this nightmare problem.