CASE STUDY – Division of Joint Tenancy or Donation When Both Are An Option.
Have you divorced at some stage and need to transfer a property in Spain from joint names to one name as per the divorce agreement?
A recent case that we had was a lady who approached us to say many years ago she divorced her husband and the divorce agreement stated that the property in Spain, in La Zenia, should be transferred into her name. She transferred a little money to a solicitor´s firm in this area to start the process but then fell ill, was not able to chase them, and for many years matters were just left as they were. But now she is fully recovered and wrote saying the following:-
“I do not think the former solicitors carried out any of the work and I cannot now trace them. I think it would be best if we started again. I also asked that they file my Tax returns in Spain. I think they might have filed returns for 8 or 9 years ago but I am not sure. I did keep up all the Community Fees paid, also Electricity & Water payments and other requirements. I am hoping to put all my affairs in order on the property. I need you to:
1. Sort out Deeds for me i.e. into my name only.
2. Make application for my NIE.
3. Check my Tax and if necessary find out my liability and bring it up to date.
4. It would be great if you could carry out this work on my behalf and I fly there and sort out everything when you have prepared the documents etc.
I would like to have everything up to date, I can then decide my options etc.I would also like to get your advice regarding Spanish Wills and future Tax implications etc as I was thinking of transferring ownership of the property to my children. Should you require any further clarification, please contact me.”
We advised this lady that we can help with all of this and it sounded as though we did need to basically start again and can sort it out for her.
Firstly, the property. We will need to quote to her for a division of joint tenancy (or basically transferring the property into her sole name). To do this we need the deeds and the SUMA (IBI – council tax bill). We can obtain a copy of a Suma bill, but we need an authorisation (sent to her) signed by each of the owners (so her and her ex-husband, as he is still an owner), and a copy of their passports. Both owners need to be involved to transfer the property out of his name to hers.
If nothing can be found with details of the NIE numbers, we will need to get a new one for both of them (even the number would help, even if they do not have the certificates). We will need to get the NIE numbers either with them in Spain in person to go to the appointment or with a power of attorney, which could be done in their home country.
The tax issue we can resolve once we have the NIE numbers. With a tax authorisation we could investigate the last year it was paid, but without an NIE number, we could not pay it.
They do not need to fly to Spain fortunately, as we can send them a power of attorney draft and they go to a local Notary at home and arrange that in our favour. Both of them need to do this (or come here to Spain).
As the property in La Zenia is in the Valencian Community, their children have a tax-free inheritance allowance of 100,000€ each in Spain. But this could change at any time. One option is instead of putting the property in her name (which will probably cost x thousand with Notary fees, Land Registry fees, Solicitor fees and other payments) and then possibly transferring ownership to their children by way of a donation or gift afterwards (which would cost another similar amount again), but that they just donate the property now to the children immediately if that is what the family wants, to take out one stage.
(Or she just puts the property into her name as per the divorce agreement and thinks about the children at some stage in the future).
We suggested the steps to be:
– she and her ex-husband (either together or separately send us a signed authorisation to go to the Suma office plus passports. We can then get a copy of the council tax bill.
– With this and the deeds, we can then prepare a quotation for the transfer into her sole name and can send you a breakdown of expenses.
– We can also prepare the quotation for a direct donation by them both to their adult children.
– If they wish to go ahead with either the transfer into her sole name or the transfer to their children, we can send power of attorney drafts to them in their home country and they can either go together or separately to a Notary there to sign.
– They would sign them there and then they would need a Hague Apostille stamp for international use, which the Notary would help them with). Or they could fly out here to do the power of attorney in Spain or come out with sufficient time to get NIEs at the appointments and to complete at the Notary once everything prepared.
– If there is a mortgage we need to be aware in order to advise what action to take.
– If the property were to go to the children then they each need to give power of attorney (or be included in a joint one). They will also need NIE numbers.
– With the powers of attorney, we can apply to the police for NIE numbers (as many as needed for them).
– Once we have the provision of funds, the power of attorney for each of them involved in a transaction, and NIE numbers the solicitor could complete quite quickly.
– Then we can look at the tax situation and resolve that.
– We would also advise sorting out a new Spanish Will for whoever is the property owner from then on and make sure their home country Wills are up to date.
We would suggest that if any of this at all sounds similar to your situation, please contact Amanda and we can help.