Spanish Tax Authority Looks at Foreign Property Owners

There is a growing issue facing U.K. residents who own properties in Spain via international corporate structures. Recent reports have revealed that over 5,000 properties in Spain are owned by foreign investors, most of whom are U.K. residents. The majority of properties owned are valued at over 1 million euros ($1.1 million) and have been purchased through companies to avoid wealth taxes.

Issues Involved

Thousands of properties are owned via double or triple international corporate structures which involve a Spanish company and a special purchase vehicle and, in many cases, a bare or discretionary trust also. Countries that do not have a double taxation convention with Spain are usually involved in the arrangements, or else territories in the outdated Spanish tax haven list, such as Jersey, Guernsey, Gibraltar, Isle of Man or the British Virgin Islands.