Quill Assets | The Birth of a Tontine Shelter | Part 4 of 6
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The Birth of Your Shelter Part Four (a): Ongoing
QUILL ASSETS, Registered Address: Harbro House, Crown Lane, Denbigh LL16 3SY United Kingdom. Reg No. 2239135
The Willwriters Association
The Association of Lawyers
Š The Quill Group S.L. v1.00, 29E07
The Birth of Your Shelter | Part Four: Ongoing
The legal requirement for ‘permanent’ office facilties – where maximum tax breaks and allowances are to be obtained This document is something that you might care to read – for general interest – even if its contents does not apply to you at the present time. The document however DOES - specifically - apply to any Patrimonio Familiar shelter owner or Bi-cell owner – or Quill Wills client who obtains any form of rental income from properties they own in Spain. If you – already - or are intending to - generate rental incomes – from your property in Spain 1. A benign income does not require you to fulfill any special requirements in order that - in these times when such incomes are being it is not subject to tax. more seriously tracked by the UK, Eire, and Spain authorities for taxation purposes – then A benign income is typically from an you are likely to want the fullest potential to investment or pension schemes - or some offset all forms of expenditure – against tax in contract or royalties - that does not involve this regard - including : any trading activity in Spain. Property transfer tax - upon the purchase of properties that are intended to create some form of rental income The complete offset of all running costs for the entire property – in respect of rental income actively received
A benign therefore - means any form of income that simply ‘arrives’ into your shelter without it trading or requiring anyone ‘to be hard at work’ - in Spain - in order to achieve that income. A benign income of almost any amount each year is (almost certainly) capable of being free of income tax, forever.
And – to remove the need for declaration of these incomes to any other authority – other than through your shelter accounts in Spain 2. A rental income is an income that is derived directly out of a property in Spain, involving – which are likely to be free of tax work - of some sort being done in Spain (including preparing the property for visitors, ‘Benign’ and ‘rental’ incomes obtaining clients etc). We should remind you – for good order – of A rental income would normally therefore the difference between benign income (on one be a ‘trading’ income – subject to tax – but hand) – and rental - and other forms of trading – with care can remain benign. income (on the other). An income into your shelter can be (1) benign – or (2) trading. If yours is a hoarding shelter there is no income and its bank account is not used.
© The Quill Group S.L. v1.00, 29E07
Rents received are a ‘trading income ‘ - but - are special - because they are capable of being completely nullified - by the offsetable of maintaining the property and of carrying out other activities or payments.
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The Birth of Your Shelter | Part Four: Ongoing
This is what we shall be seeking to achieve for This might be in order that we can honestly you. declare - and then totally offset - any income In order that this rental income can be you might derive from renting out a room or properly and honestly declared BUT - THEN apartment that is included in the escritura of rendered free of tax - requires us to jump your property in Spain. over a hurdle or two. 3. Other types of trading income generated in Spain - such as running a bar or working from home as an architect generate income - BUT - that income is not capable of being offset by the entire costs of maintaining and improving etc, your assets in Spain - and thus must be taxed if only a little. There is obviously scope - if you are running some form of agency from your back bedroom to offset the costs as they relate to your back bedroom against the income from that business activity.
It might be – for example – be that you invite relatives to come to stay and put them up in an apartment or bedroom as paying guests – OR - that you rent your entire villa through an agent for all or part of the year – OR - that you visit your villa as often as you can and rent it to friends or family whenever you are not using it.
The law in this regard Under normal circumstances you will have difficulty in making anything other than a part claim in respect of the cost of your property. This is because Spanish tax rules say that unless your sheltered family business owns a separate office address - giving you access to sufficient office facilities to run the business – then the property you own cannot possibly be both (1) permanently available for rent and also (2) a permanent base from which you can run your business. You cannot have things both ways.
Either the property is a place from which you can continuously run your business whenever If - however - you are running a bar two that requirement might arise - for meetings kilometers away - then there are no possible with the revenue or your accountant - OR - it is offsets relating to the bar against your permanently available for rent. property assets in Spain. If it is not permanently available for rent then We hope this puts the issue of income into your shelter into focus. Please let us know if not and we will explain further. Now – to move to the purpose of this document.
its total costs cannot be offset against any rents received (even if those are only for a week or a month).
If a claim is made to offset the entire costs of the property against rental income (even if only for The purpose of this document a week or a month) then it must be possible to The purpose of this document is to make it demonstrate that there is a separate office possible to jump over one (very low) hurdle facility permanently available at all times – in order that we can make a claim for tax whenever it is required. exemption – on behalf of your shelter - that is likely to be of 100% of any form of tax - relating to any income or benefit you might receive from the use of your main property asset in Spain. © The Quill Group S.L. v1.00, 29E07
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The Birth of Your Shelter | Part Four: Ongoing
In this way your shelter owns a permanent lifetime storage space - where (if only theoretically) its documents, papers and necessary items can be kept – along with the right to rent a desk or office space or meeting rooms etc, if and when they are required.
The Tambor solution
The escritura involving a space that your shelter owns - becomes the legitimate permanent ‘office address’ of your shelter – separate from the property address that is either occasionally – or at all times – let – or sub let.
In order to meet the needs of many clients of Next step differing types – Quill has made ‘the Tambor’ To provide your shelter with a ‘permanent’ arrangements. office address through the Tambor – please visit The Tambor is a local property portfolio - of www.tambor-properties.com – and complete touristic rental and long term rental properties the online form – or – complete the cut out maybe of traditional Canarian fincas. form below - and post it to Tambor Patrimonio This portfolio includes ‘serviced office’ Familiar, La Vegueta, Lanzarote, Las Palmas, Espana. facilities. You can send payment of €2,000 – or £1,400 – by euro cheque on a Spanish bank directly to Tambor Patrimonio Familiar S.L. – or if it is more convenient for you – transfer it through Quill – in the same way as for other payments – in which event we shall advise you of your payment to Tambor Patrimonio Familiar S.L. made on your behalf – and Tambor will provide a receipt.
From the point of view of providing ‘the office qualification’ – the value of the finca portfolio is not of great relevance. The Tambor makes it possible for any shelter to purchase its own ‘permanent’ office space – for £1,400 (€2000) - thus jumping the office qualification hurdle described above. The ownership ‘escritura’ that is purchased includes additional rights – giving access to other surrounding office facilities for the owner to make use – on a daily rate basis - involving adjacent - shared office facilities and space – just like any serviced office in Dublin, London or Madrid.
© The Quill Group S.L. v1.00, 29E07
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