Selling my property to my UK business partner

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08 Jul 2012 13:05 by JayTB Star rating. 7 posts Send private message

Hi there.

I have a cortijo, that I am wanting to release funds on, but it appears no Spanish bank will do a re-mortgage these days.

So I am thinking of 'selling' my property to my mate who is my business partner in the UK.

He would get a mortgage in his name, purchase it, and then I would use the funds.

I am just wanting to know how much tax he the 'buyer' would pay, and if I formed a limited company prior to all this, could I get a postponement of CGT for upto 5 years as I've heard?

Many thanks

Jay

 

 





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09 Jul 2012 17:10 by jaldridge Star rating in Manilva. 144 posts Send private message

jaldridge´s avatar

You are probably better doing what's called a "subrogacion" with your mortgage which is where the mortgage is transferred to the new buyer. The benefit with this is that it's cheaper than opening a new mortgage so your friend (or you) will save some money.

In terms of the CGT I don't know...they keep changing things!



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19 Jul 2012 19:10 by scornikgerstein Star rating. 2 posts Send private message

Good afternon JayTB

As jaldridge says, a “subrogación” would be much more profitable as it would be easier and more cost-effective than selling. By “subrogación”, the individual liable to pay the mortgage instalments transfers his/her obligations to a new individual i.e. the purchaser who in turn substitutes the former.

In relation to any capital gain arising from the sale, you would only be liable to pay Spanish CGT on the assumption that the purchase price exceeds the price for which the property was initially acquired.

Please do not hesitate to contact us in case you need further advice (see our firm’s details below).

 

 


This message was last edited by scornikgerstein on 19/07/2012.

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19 Jul 2012 21:09 by jaytb Star rating. 7 posts Send private message

 Hi there,

Many thanks for your reply,

Sorry, I have not been clear enough, I do not have a mortgage on my property,

I am wanting to release equity on it, that is the problem,

I wish I did have a mortgage on it, but I bought it cash.

Many thanks

 

Jay





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15 Jan 2013 11:51 by Trimer44 Star rating. 5 posts Send private message

Yes you right, it is quite simple and easy process to sell your ownership to the business partner. But before to do that know about all its asstes & liabilities.

 

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This message was last edited by Trimer44 on 19/01/2013.



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