NEWSLETTER – September 2011
| Whats in this issue: | |||
| The Green Box | Torrevieja Salt Lakes | Taxes | Comaskey Properties |
| Bank Holidays | Financials Trust | Sandwich Shop for Lease | Travel Offer |
Whilst at the Notary doing Wills or Notarised documents (many clients like to arrange for an official Notarised copy of their passport, or driving licence) there is often time for our staff to chat with clients.
The other day one of our clients kindly told this story to Silvia and we´d like to share it with you.
The Green Box
Jim McArthur was a TEC Australia member. His father John was also a TEC member. John called his son Jim to let him know that he’d be flying to New Zealand the following day to try to close an important business deal. Jim, a pilot in the Air Guard Reserves warned his father that potential Typhoons could make travel hazardous. John laughed and reminded Jim that if anything tragic happened, to remember to get the “Green Box” out of the closet in his bedroom.
The next day, John was killed when his plane crashed into the side of a mountain on the north island in very low visibility. Several days after the funeral, he remembered his father’s words about the Green Box.
He called his mother and they brought the Green Box to the family attorney. Inside, they found 28 envelopes. Here are the labels on the envelopes:
Letter to my Wife
Letter to each child (3)
Letter to the employees
Letter to my mother
List of most important 5 employees in the company & their strengths/weaknesses
Off balance sheet deals
Organisational Chart
Details of any company trusts
List of personal and business people that should be contacted in the event of passing
Deals in process and evaluation of them
Strategy that I am thinking about but haven’t told anybody about
List of Trusted Advisors and their roles (may or may not be currently working with company) such as attorney, accountant,
Instructions not addressed in Will
Copies of POA documents
Copy of Passport, Birth Certificate
Copy of all credit cards
Copy of physical property titles
Personal stock portfolio information
Details of Life insurance and of all other insurance
Copies of personal property valuations
Computer passwords
Personal financial Statement
Extra passport photos
Medical/Dental Charts
Funeral/Burial Instructions
Mementos and to whom I’d like them given
We think this is a great story and shows how thorough some people can be! Although we certainly don´t think that most people would go this extent, we do recommend that you keep notarised copies of your passport in your car (we can arrange this and just need the document to be brought to the office and we charge 10€ to go to the Notary to do this).
Mr McArthur went way beyond simply leaving instructions of where his Will was! But let us remind you that if you are a UK or Irish resident you are able, unlike the Spanish or residents of other countries, to decide who inherits your property.
If you die without making a Spanish Will, intestate, then the law of the home country will usually prevail and Probate, or Letters of Administration, (if there is no Will in the home country), will be applied for in the Home Country, then need to be translated to Spanish. Contact Amanda onsales@spanishsolutions.netfor further details on how to make a Spanish Will or with any queries. We charge 150€ for a Will or 280€ for two.
TORREVIEJA – The SALTLAKES
As many of you know, Torrevieja is surrounded by two large and beautiful natural salt water lakes which form the “Salinas de Torrevieja” and are an official Spanish nature reserve. The la Mata salt lake was declared an important area for birdlife in 1989 and the whole area was declared a Natural Park in 1996. The history of the salt lakes goes back many years to the 13thCentury and they are the oldest and biggest salt lakes in Europe.
The Torrevieja lake is still in production today but there is no longer salt produced at La Mata. There is very little vegetation in the salt lakes due to high level of salinity, although there are some rush beds mainly in the La Mata lake which are home to rush bed loving bird species. The lakes are an important area for birdlife and there are over 200 species that visit the area including flamingoes, avocets, zapullines, plovers, stilts and grebe.
There is a tourist information office close to the N332 at La Mata with leaflets and information about the salt lakes and there are two distinct and well signposted routes (one for walking and one for walking or cycling).
Torrevieja itself now has a Salt Museum located across the road from the old RENFE Station and Natural History Museum. The centre offers an overview of Torrevieja’s salt industry and its history. In the centre you can see for yourself what industrial salt looks and feels like, images of the salt lake, an overview of the extraction process and topics such the formation of the salt harvesting, mining, and technology.
Last Winter´s harsh weather and abundance of snow in Northern Europe and even around Spain, has led to a change in fortunes for Torrevieja’s most valuable natural, commercial resource, Salt. While the majority of the city’s income is due to the influx of tourists who enjoy the clean air, sun, sea and sand, the major manufacturing in the city remains as it was in Roman times. Salt then was actually a currency.
Salt production this year has apparently increased by 15%, up from 600,000 tons in 2010, to 700,000 tons this year.
The salt process begins with the entry of the sea water into the lagoon of La Mata, where because of the evaporation caused by the sun and wind, it becomes heated and concentrated. From this lagoon it is transferred to the Torrevieja lagoon, where it is mixed with the brine which has come from the underground salt deposit in Pinoso, that consists of five wells into which high pressure water is injected which then results in the salt dissolving. The resulting brine is carried by a 50 kilometre long pipeline to the Torrevieja lagoon where it mixes with the brine already there, which has come from the La Mata lagoon.
What most can see from afar are the process of when the salt is piled up in large heaps of about 20 metres in height, called ‘garberas’ or Salt hills. This is then perfectly suitable for any use for which it is required: de-icing roads, decalcifying water, chemical industry, food industry etc. and can be used no matter how old it may be.
It is well worth a visit to the museum and to the lake of La Mata, where you are sure to get some beautiful photographs.
TAXES
We still get emails which show that there is confusion over taxes, so I will try to explain in the following a bit more about taxes in Spain.
For people who are renting here and thinking of buying a property, what sort of annual taxes are they looking at paying?
When someone buys a property in Spain, they currently pay a one off 7% Transfer tax to the government.
With regard to taxes annually, firstly, there is the local tax known as IBI orSUMA (as this is the name of the collecting agency) . This paid to the local Town Hall once a year.
This tax is charged to cover expenses such as maintenance of local facilities, parks and leisure areas and all kinds of infrastructure provided by the Town Hall. Often people buying don’t realise that charges are also made by the Community of Property Owners which manage the maintenance of the communal elements of urbanisations, e.g. the swimming pool, green areas, stairways, lifts etc. Obviously this does not apply everywhere and is not a tax, but it is a charge people need to remember.
If we are talking about someone who has moved to Spain and is resident or spends the majority of their time here (so for more than 183 days in one calendar year even if they are not consecutive), then they become legally liable to be charged Spanish Income Tax as a Fiscal Resident.
As a Fiscal Resident then someone pays two annual types of taxes, the IBI I mentioned before and Residents Income tax , which is calculated on worldwide income. However, Spain has Double Taxation agreements with many countries – which ensure that you do not pay tax on the same income in both Spain and your home country.
You can still be making a Residents Income tax return, but be paying taxes elsewhere and not be a fiscal resident of Spain. You are not a fiscal resident unless you have been issued with the appropriate fiscal residency certificate by the Tax Authorities and then you are declaring all income here and preventing double taxation.
We have a tax expert and definitely recommend a resident has a discussion regarding their individual situation as they are always different.
Non Residents
If someone owns a property in Spain but is still a UK resident, what are their tax obligations?
In Spain, if you have a property it is automatically considered as a type of income and all owners named on the Title Deed should present an annual declaration for each property owned. Often people are unaware of this and if they don´t pay, they will eventually be caught up with and will end up paying fines.
The Non Residents Income Tax is based on your property and is in addition to SUMA I just mentionned. It doesn´t relate to income tax on wages or pensions, just property ownership. Again, it is calculated again on the rateable value of the property. We make these calculations and present the returns for our clients.
If an owner decides to rent out their property for the time that they are not using it, are there taxes to pay on the income?
Yes, they also need to pay a rental income tax for any rental income received. The income to be declared in this case is the total amount collected from the tenant, without deducting any expenses. A tax form should be sent after the termination of every rental agreement, in addition to the yearly declaration of income.
What taxes are payable when a house is sold in order to buy a different house in Spain?
Sellers of Spanish property can possibly have 2 types of taxes to pay. Capital gains tax on any profits from the sale and Plusvalia, which is a tax from Town Halls, collected as a result of change of ownership of land. It is charged on the increase in an official set of values for the property and the amount can vary depending on the amount of time passed between sales. Both taxes are actually quite similar in theory.
As a fiscal resident you should not have to pay any capital gains tax in Spain if you are re-investing everything in another property which will act as your main residence. It is important to be able to demonstrate that you are a fiscal resident through having completed your tax declaration forms. As a resident, but not having paid taxes or made returns and having been a fiscal resident you may still have to pay the CGT.
What taxes are payable when a house in Spain is sold in order for the owner to relocate to the UK or any other country?
If you are non resident or going to be, you are likely to have to pay Capital Gains Tax of 19% on the profit from the sale of your property.
The Spanish Tax Agency requires that a buyer from a non resident withholds 3% of the price immediately and pays it directly to the Tax Agency. Following the sale, the seller makes a declaration on the profit there has been between buying and selling. If there is no profit, or very little, the sellers can reclaim the 3% withheld or the difference due to them, alternatively there may be tax to pay of up to 19% in total.
For the non resident sellers trying to reclaim any of the 3% withheld, this will only be considered when they have kept up to date with the non resident tax returns which are obligatory for home owners.
Very few people enjoy discussing taxes or charges, but if you have friendly, professional clear advice and know where you are, it makes matters so much better in the long run.
We provide consultations by appointment free of charge and are always happy to help. Contact Poli on info@spanishsolutions.net.
Comaskey Properties
We have mentioned many friends during our newsletters but I don´t think I have actually written an article on why to buy or sell your property through Comaskey Properties (some of you have I know).
Since 2002 they have been leading in property sales on the Southern Costa Blanca. Very few agents have the experience and good reputation that they have established and very few clients see the variety of property that they have on their books when they visit other other agents. They also offer long term and shorter term rental properties.
By using a professional estate agent rather than non registered agents or trying to negotiate privately, clients often avoid losing deposits, paying to much, receive help with legal and financial matters, additional advice and have the safety net of someone to talk to should something go wrong, no matter how small.
They are currently offering that if you recommend a friend to buy from them, they will send you and a friend on a free ALL INCLUSIVE CRUISE.
To clarify:
- The Cruise is for two people.
- It really is free.
- They do not add the cost on to your friends house purchase.
- It is all inclusive.
- You do not have to be an estate agent.
- You pick the dates and itinerary. There are three itinerary options.
- They cannot back date it.
- Yes, it is as good an offer as it sounds.
They emphasise that importantly, it goes without saying, that they´ll take care of your friend too before during and after their purchase with their usual expertise and professionalism. Contact tracie@comaskey.com.
OCTOBER BANK HOLIDAYS
October 9th 2010
Day of the Valencia region / Día de la Comunidad Valenciana
This is a regional fiesta just for the community of Valencia.
October 12th 2010
Spain day / Día Nacional de España
This a day for the Spanish to celebrate their nationality.
Financials Trust.
We thought that would let you know that Comaskey Properties have opened a new financial services division, Financials Trust, operating from their offices at La Zenia. Financials Trust have brought together a number of financial services – including Mortgages, Currency Exchange, Pensions, Investments and Management Accounting Services – to provide clients with clear advice and practical solutions to their financial worries.
One of the most requested pension products today is QROPS? But what is it? With QROPS, Qualifying Regional Overseas Pension Schemes, you can move your pension out of the UK, and enjoy a range of benefits, for example:
- Immediate lump sum payment
- Greater investment choices
- Tax efficiencies
In addition, it is often wise to have a consultation when in Spain regarding your pensions, particularly if you have company pensions that you have not taken or are coming close to retirement. There may be things that you should be doing to maximise your pension arrangements but would never realise. Email Claire on info@financialstrust.com for an appointment or with any queries.
Whether you are buying / selling property, making regular transfers abroad, or simply purchasing spending money for your travels, their Foreign Exchange partners enable them to access the best rates available, and there are no fees or commissions to pay. They can arrange one-off transfers, regular payments between accounts and even FX Cards – great for holidays and travels. And for large value transactions, you will be offered advice on the best timing of your transaction.
With interest rates remaining historically low, and home prices at the 2001 level, now is a good time to think about a mortgage and buying property in Spain. They have developed relationships with several High Street Banks in Spain, and can negotiate finance of up to 80%. They will advise you about the availability of mortgage products from Spanish Banks, and tell you exactly what you need to provide, in order to secure your mortgage.
To arrange a consultation to discuss your investment, currency or mortgage requirements, and for more information about the services they can offer you, please visit their website www.financialstrust.com, or give Claire a call on 960 652 117
Sandwich shop for lease
Comaskeys also have an interesting commercial this month across the road from us if you’d like to see our happy smiling faces every day!
If you are looking for a new venture, and particularly if you have some relevant experience, this could be for you. Sam Widges, (The Sandwich Stop) is available for lease or sale.
This potential gold mine is ideally located on the always busy Paddy’s Point lane and would perfectly suit a semi retired couple.
The unit is relatively small and ideally suited to those with previous experience to sell high margin, quick turn around products such as bagels, wraps, cakes, coffees and quality sandwiches for eat-in or take away. It has indoor and outdoor seating. Rent is 1,350 euro per month with negotiable key money and sale price is 250,000 euro.
E-mail Ian for details…. property@comaskey.com
TRAVEL OFFER
MARBELLA – 06 November 2011
From just 189€ per person for 4 days / 3 nights half board accommodation and also
- Guided Walking Tour in English in the Historic Centre plus lunch
- Entrance into Picasso Museum
- Optional Excursion Shopping in Gibraltar with English speaking Guide
- Coach Travel Included from La Zenia/Pilar de la Horadada
Tlf: 966 761 492 - Fax: 966 730 222 Email: orihuelacosta@estivaltour.com www.lazeniatravel.com
The team :
Poli Borisova
Ana Maria Barbadora
Eva G. Gilmartin
Lynne Henderson
Helena Labarta
Angie Real
Silvia Sanchez
Amanda Thomas Editor: Amanda Thomas, Spanish Solutions
sales@spanishsolutions.net
00 34 966761741 Visit us online at www.spanishsolutions.net