Several Spanish Courts are already ahead of the game on using contractual artifices to evade taxes, pretty much what the Equity Release was all about. The chief difference between both setups is that whilst the ones already set aside were mutually agreed on the understanding that it was illegal to do so, on the Equity Release banks lied as to the legality of the matter and misrepresented the truth.
As Nordea put it
We offered you advice which we thought was correct at the time of publication. It was however your prerrogative to go elsewhere to obtain correct advice…(!)
In contrast to Nordea’s clever plan, Madrid-based National Audience said the following about contracts used to avoid Capital Gains Tax:
It is reasonable to presume that the profuse and complex series of contracts carried out by the parties answered to a fiscal strategy and, in reality, had no other purpose than to evade taxes…In summary, the object of each of the contracts agreed to was unconnected from the real economical nature that they are intended for, and were rather used seek tax avoidance, once the contracts were succesfully implemented, on the gains derived from the main agreement.
The Superior Court in Navarra established that:
No juridical contract can enjoy this status if it is intended to attain a tax advantage, because no tax advantage can be transferred between the parties, and thus such contract produces no effect in respect of third parties…what has been confirmed is a surreptitious avoidance of taxes which none of that parties were entited, directly or indirectly, to legally avoid.
And more recently, on the 2nd of February 2012, th Supreme Court in Madrid endorsed all prior judicial opinion on the matter by ratifying that:
We must conclude by asserting the illicit nature of the object of the contract insofar as the aim pursued by the parties was an illegal and immoral business common to both…exemption and tax advatange…without any of the parties being entitled to it.
If the contracts are not valid, there is no question of them being set aside and damages being awarded…for they never existed.
TO ALL MEMBERS FROM THE ERVA INVESTIGATION TEAM.
As you will no doubt derive from the judgements shown above, these are very important and positive judgements for our members. Erva have been in touch with their lawyers, headed by Antonio Flores of Lawbird Legal Services. As a result Lawbird will be issuing writs to the courts concerned, asking that the contracts be declared “null & void. Most of you will be aware of the promises you were made, both orally, letters and brochures that by entering into these mortgage loans under there would be considerable tax savings both IHT & Wealth Taxes, which we now know to be untrue. Nordea Bank, Danske Bank & Rothschild Bank, as well as their agents/IFA are the main perpetrators.
Landsbanki must not be excluded from the list of delinquent Banks making these false promises and manipulating facts and figures to deceive potential clients, in my opinion.
I think Nordea Bank, Danske Bank, Rothschild Bank and Landsbanki are in the same Luxembourg frame and that all the cases against them are therefore relevant in so much as deception and lies, using the name of Luxembourg to back these lies and grab clients for their delinquent banks, is the basis of all complaints.
This is why it is so important to keep up with all the cases against all the Luxembourg banks and why we must all work together and help our lawyers help each other with these complex cases stemming from Luxembourg.
Thanks to ERVA and their enterprising lawyers, we are starting to work as an effective group, whichever Bank and whichever country we reside in.
BRAVO to all in Spain fighting for Justice against the guilty Luxembourg based Banks and thanks to your lawyers and Judges!
I understand the gist of the judgements, more importantly it would now appear that this is difinitive case law, which under Spanish judicial law all judges no matter which court these come before must rule in accordance with this Supreme Court Judgement. What I don’t understand is the next step we take. Do we simply serve a writ in each court for each person against the banks concerned and automatically the judge will rule these equity release schemes which have been sold with the purpose of avoiding or even mitigating taxes “null & void”. Also what happens in the case of those banks that have in fact been charging interest on the loans, would that be deemed criminal or could one sue the banks civily for the restitution of these funds. I notice that it states that no damages can be awarded as the contracts never existed, however the victims have been relieved of money by a product that should never have been sold. Perhaps, erva lawyers could comment on this, or each person should contact his lawyer for some guidance.
FROM YOU ERVA TEAM.
According to our lawyer, the Supreme Court’s judgement was, as the contract never took place then no damages would be applicable. However as the contract never took place then any monies charged by the bank in respect of interest on the loan and like charges would have to be returned. In the case of Nordea Bank, Luxembourg as in the recent claim lodged with the Mercantile Court for misleading/fraudulent publicity, the onus would be on Nordea Bank to show that there was some fiscal advantage for IHT & Wealth taxes in the equity release scheme they promoted and sold. As of writing we have not heard from the Mercantile Court nor from the Hacienda in respect of our denuncia last April. For certain we are sure that both institutions will shortly be replying with their ruling.
In my eyes these judgments are very important for our cause. If i am reading the article correctly, these judgements were made on contracts where both parties were aware of what was happening. Applying some common sense and logic (very dangerous I suppose where courts and banks are concerned!) then where we have been misled into these these contracts to avoid tax, the courts should have a more straight forward decision to void them.
In addition if the facts of other posts concerned are added: where courts have found complex financial transactions where the average investor cannot be expected to understand the risk and other things like misleading advertising etc etc then surely all courts should come to the conclusion to void these schemes and put us all back where we were before we were conned into signing up!!
Thankfully the ERVA team are putting this altogether, I suppose the difficult bit is finding the best place to issue the actions against the banks so that a speedy conclusion can be reached. No doubt Antonio and his team are ahead of the game on this.
There is no question that these victims primarily entered into these schemes as a result of the scare tactics of the banks. From a personal point of view I really did believe that this was a legitimate way of reducing any IHT & Wealth Taxes and totally legal as the bank put it. The last thing I wanted was to avoid/evade paying my rightful taxes to the Spanish Government. Not only was I told this on a face to face basis, but they followed this up in writing. I have all the documents to prove it. So Nordea Bank you have been caught with your trousers down and you know it. There has been so much information with supporting documents published on this web site. What is more Nordea Bank has still one outstanding criminal complaint being investigated by the Provincial Court in Malaga. Also a claim with the Mercantile Court in Malaga for misleading /fraudulent advertising lodged, yet they still carry on with their agressive foreclosure programme as we have seen recently in the Alicante region. I really hope that the lawyers representing these victims start their campaign in issuing writs against Nordea Bank, Rothschild Bank ( and their non licenced IFA’s ) and Danske Bank. Somehow we have to make the courts aware of all these cases and hopefully they will start their own investigations.