The Spanish Tax Office has finally ruled on the validity of using mortgage loans to avoid wealth and inheritance taxes.
ERVA will post the original binding consultation letter, named as CONSULTA VINCULANTE Patrimonio -01347-13, in the next couple of days.
Meanwhile, this is what they had to say about this dodgy set up:
- That a calculation for wealth tax cannot take into account, and be reduced by, the value of the mortgage loan, unless the loan is used for the purpose of financing the acquisition of the property, as it is not otherwise considered to be charge on the property, but a personal debt.
- That according to article 7 of the Inheritance and Gift Tax Act, non-residents for tax purposes will have to pay taxes on any sums received from life insurance policies signed by Spanish companies or foreign companies operating in Spain.
- That the capital of a mortgage loan granted to a non-resident by a foreign bank is not subject to IHT.
- That attempting to offset a mortgage as described above would constitute tax fraud, pursuant to the General Tax Act 58/2003
Further to the above, we received a clarification email stating the following:
- That a calculation for IHT cannot take into account, and be reduced by, the value of the mortgage loan as logically, the mortgage loan is not considered to be a charge on the property but a personal loan.
Email sent to ERVA:
From: S.G. de Impuestos Patrimoniales, Tasas y Precios Públicos
Sent: miércoles, 06 de marzo de 2013 12:26
To: Fatima Izquierdo
Subject: RV: A/A D. José Javier Pérez-Fadón Martínez_Consulta vinculante_Patrimonio 01347-13
Estimada Sra. Izquierdo: La contestación V0590-13, fechada el 25 de febrero pasado, establece la no deducibilidad en la base imponible del Impuesto sobre el Patrimonio, para supuestos de obligación real de contribuir, del préstamo hipotecario extranjero en cuanto no es carga o gravamen de la vivienda, sino deuda. En el ámbito del Impuesto sobre Sucesiones y Donaciones y para la misma hipótesis de obligación real de contribuir, como decíamos en la mencionada contestación, el causahabiente no tributará por el capital del préstamo y, como es lógico y resulta de no tratarse de carga o gravamen sobre la misma, tampoco podrá minorar el valor de la adquisición de dicha vivienda en el importe del préstamo.
Confío en que quede así aclarada la cuestión planteada.
Saludos.
Javier Pérez-Fadón Martínez.
Subdirector General de Impuestos Patrimoniales, Tasas y Precios Públicos.
Finally, we have requested from the Tax Office that the email below is incorporated to a binding letter.
