QA-TONTINE-shelter_part5_v2.22,29K06 by Simon Harris

Quill Assets | The Birth of a Tontine Shelter | Part 5 of 6

A Quill Group Company

The Birth of Your Shelter Part Five: Consolidation

QUILL ASSETS, Registered Address: Harbro House, Crown Lane, Denbigh LL16 3SY United Kingdom. Reg No. 2239135

The Willwriters Association

The Association of Lawyers

ÂŠ The Quill Group S.L. v2.22, 29K06

The Birth of Your Shelter | Part Five: Consolidation

Index Consolidation ............................................................................................ 3

The Consolidation Agenda ........................................................................5

A Spaniard in the works. Quill’s in your Shelter - or not .........................10

Coming soon - ‘Transfiguring’ your Shelter ..............................................13

Shelters as ‘Investors in Spain’ ..................................................................17

Consolidation Forms.................................................................................21

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The Birth of Your Shelter | Part Five: Consolidation

Consolidation Once again - however - you do not need to ‘feel’ this detail - because we will always explain these things to you verbally - face to face - at any length.

Routine maintenance The basic cost of maintaining your ‘Hoarding’ Patrimonio Familiar Shelter - including our visits to you - and our subsequent conferences about your Shelter with legal and accounting advisors - is €500 or £400 - per year - payable Consolidating your Shelter - following its formation, to THE QUILL GROUP S.L. (Quill in Spain CIF: means making sure everything is working - doing B-35918119). basic housekeeping, and starting to prepare your You can compare this with the annual service Shelter ‘administratively’ for its future. and MOT test on your car. We made reference - during our discussions with you - (and in PART FOUR of THE BIRTH OF YOUR SHELTER) to the quite a lot of work needed to be done after your Shelter had been formed.

If your car is not a family saloon however - but a racing car - or an articulated lorry - then routine maintenance and servicing inevitably costs more.

This is based on an ‘Annual Review’ process - based around a once a year ‘home visit’ to you when you are in Spain - to bring you up to date with anything that you need to know - and so that we can obtain the information you hold - in order for us to make the necessary returns on your behalf.

to information we need to give you - you can complete all outstanding issues relating to your Shelter simply by sending ‘the problem’ to us.

That applies to Shelters. Also to its routine - yearly and other The fundamental purpose of the Shelter - as it requirements. was put to you - a foreigner with assets in Spain - was to protect your family assets - hereafter DIY - or - Quill against inheritance - or gift - or wealth or capital Whilst we have made it clear that it is possible gain - taxes in Spain - through the years. for you to maintain your Shelter yourself using UK and Spanish fiscal and legal advisors of your That occurs automatically within the above own - Quill - naturally - offers a totally inclusive arrangements. and cost effective service covering everything When you make that payment to Quill - apart you need through the years. from giving us your instructions - and listening

We will supply (usually post paid) envelopes - or bags - addresses to our offices in the UK or Spain.

All you need do is to put any correspondence you receive or feel that we should see - into As you will realise, lots of different families - in those envelopes or bags to send to us (perhaps very differing circumstances - have Patrimonio recording the delivery - and keeping copies for Familia Shelters. yourself if you think you need to do that). Some live in the UK - or Ireland - or elsewhere Our systems include ‘scanning’ important - whereas others are settled in Spain. documentation - and preserving those - along There is therefore - once again - quite a lot of with your paper records - in QUILL DOCUMENT BANK. detail that you may wish to understand.

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The Birth of Your Shelter | Part Five: Consolidation

Dealing with income What we will next be helping you understand by way of meetings and - the information in this PART FIVE and in part SIX - is that your Shelter is capable of dealing very effectively - and generously - with income and / or profits you already - or may in the future - receive into Spain.

Transfiguring into a ‘Castell’ It is in this regard that your Shelter becomes (i.e. is transfigured into) a Castell Class Shelter. The manner in which a Castell Class Shelter deals with income and profits is a whole new conversation. It involves differing levels of maintenance - referred to earlier as being rather like the yearly service and MOT of a vehicle.

A Hoarding Shelter At its basic level - if your Shelter is simply ‘hoarding’ - i.e. doing no more than sitting on assets - then everything is exactly as we said it would be - and yearly maintenance can be said to be like looking after a static ‘trailer’ or a permanently ‘garaged’ vintage car, costing €500(£400) per year.

A Benign Shelter For your Shelter to be ‘asset hoarding’ AND also capable of effectively handling a moderate income - comes with a little extra preparation - and yearly cost - like looking after a ‘family car’ costing around €800 (£600) per year.

A Virulent Shelter If your requirement however is to turn your family Shelter into a racing car - or articulated lorry - capable of dealing with complex situations and of yielding substantial profits - then - work will be required on the structure of the Shelter (fitting the lorry bed) - as well as there being an increase in its maintenance and servicing - which is likely now to be required on a quarterly (rather than a yearly) basis costing from €1200 to €2400 (£900-£1800) per year.

PART FIVE - Consolidation This PART FIVE - CONSOLIDATION section and other documents that follow - step you through the ‘routine’ (i.e. if - you have a static trailer - or you are to run a ‘family car’) type of Shelter options - and all that they entail. We also pre-warn you about the next PART SIX - TRANSFIGURATION - section and our next visit - which will take you through all of the other options and their deeper implication. By necessity there is information in here that will not apply to you personally - or your family - which you can just ‘jump over the top of’. Some parts of these chapters are more technical than you may like - which you can just leave to us to explain to you - in person - when that time comes.

These processes also call for us to obtain a quantity of information - from you (in the forms section) for use later in the year in making returns - and when we prepare the minutes of your meetings. For, although this is a family (orange grove) business structure - it is a business - and must be run that way. We shall - for example - create ‘confidential’ - for your eyes only - extraordinary and annual general meeting minutes - and balance sheets and accounts for you to distribute (as you wish). You are protected from taxes BECAUSE everything is done correctly.

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The Birth of Your Shelter | Part Five: Consolidation

If you think that is unjust – let along crazy – we As soon as your shelter was created – we agree – and are proud to be able to let you shake encouraged you in PART THREE – to look off those shackles – forever. around at your liquid and moveable assets and As soon as your money is tax paid and yours – savings – and to centralise them inside your you can now push it into a ‘Spanish Fog’ – where shelter. no-one in your homeland tax authority will ever This called for a ‘portal’ – for you to move ‘tax see it – to be able to tax it – again.

A cash route in (and out)

paid’ liquid assets by bank transfer – cheque It will be as if you spent it on a cruise ship – BUT – internet – or cash. – this ship is YOURS.

That portal is your ESTATE CONTROL bank Its increase in value will remain yours – and account in Spain (with both sterling and euro your children’s and their children’s – untaxed. bank accounts for UK citizens). Our immediate concerns - now - however - are Once that ‘portal’ is open – you should consider to CONSOLIDATE your Shelter - completing moving all of your tax paid assets into it – to routine housekeeping. instantly neutralise a number of very unfair This is done by Quill Assets (in Spain) - sometimes forces. involving other Quill departments - such as Quill You might think that – once you have earned Document Bank LLP. your money – and paid tax upon it – it is yours to do as you wish with ‘free’ of further penalty. At the end of the CONSOLIDATION process. Your Shelter will be fully operational - and - you Unfortunately not. will know how to operate it ! If in your lifetime you earn 100,000 pounds / euros – or anything and SPEND that money – in The element of ‘CONSOLIDATION’ involves and your homeland – or anywhere you like – then includes: that is THE END of it. 1. Quill’s ongoing role in your Shelter - or not So – if you spend your money on a cruise – or on 2. Quill Corresponding on your behalf fine wines and food – what is yours is yours. 3. ‘Original’ and ‘Copy’ Documents kept in your possession If however you buy property – then what is 4. Your Shelter bank account yours – SUDDENLY – is not yours. When your property creates wealth – through 5. The four annual fiscal and registrar returns an increase in price (that has nothing to do with 6. Your Will. you or your actions) part of your money – now 7. Your 3rd Minutes. – once again belongs to the ‘tax man’.

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The Consolidation ‘agenda’ The QDB service is provided at a €50 annual cost which includes the routine movement or return of normal sized documents and the ongoing addition of new documents as that arises. During the consolidation meeting, we shall ask for your agreement to arrange matters in this way - and for details of anyone else who you would wish to receive any (copies) of the Shelter documentation.

1. Quill’s ongoing role in your Shelter - or not

3. Your version II LLP Constitution

One of the actions that takes place in the notary’s The question of Quill’s ongoing role in your office is the fusing of your Spanish shelter to its Shelter raises several issues - dealt with in their English speaking branch. own chapter below. When you walk into the notary’s office, an unattached Spanish chamber that will receive all of your assets in Spain – or will at a later date purchase assets in Spain has been prepared Following the formation of your Shelter, you – AND - a separate overseas branch company should have received or be receiving a number – situated in an English speaking country. of important documents. The notary will fuse these two together – giving We have already raised the subject of the control either immediately - or at some point in importance of the people who are central to the future – to the ‘English speaking’ branch. your family Shelter - either having copies of - or having access to - the most main Shelter The ‘English speaking branch’ will then be the administrador of the Spanish entity (and not the documentation. other – normal – way around) and the English In our consolidation meeting we will provide speaking branch will hold all of the voting sway you with one full set of all of the documentation over the Spanish entity. relating to your Shelter bound in a manner that Thus it becomes the constitution of the English you can keep safely yourself. speaking branch that rules the roost. Unless you instruct us otherwise, however, this will be a colour photocopied set of the original In order that this process does not take all day documentation, which QUILL DOCUMENT – and does not involve all of your beneficiaries BANK (QDB), formed in 1989, will at all times being in the same room as the notary – we provide the notary with a Spanish translation of retain in safe storage for you. a ‘slimmed down’ version of the first generation Documents in QDB are kept in secure and fire of the English speaking branch company proof containers designed for the long term safe constitution. storage of documents. As soon as the English speaking branch is in QDB provides a written receipts and schedules complete control of the whole shelter – however of all documents it holds along with identity card – it is important that we IMMEDIATELY replace for yourself and anyone else you wish to include, it with a more substantial constitution that will providing access details to your documents. meet all of your needs.

2. ‘Original’ and ‘Copy’ Documents kept in your possession

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It has to be possible (though we hope not a reality) that you can walk out of the notary’s office under the first bus that comes along – and that your shelter will survive and operate exactly as you want.

This is of administrative relevance only.

Therefore as you come out of the notary’s office (though we will probably set it all up before you go in) The Quill Group partner who is dealing with your affairs on the day will run through a draft of the version II constitution, which revokes and replaces the version I constitution.

behalf in a formal board of partners meeting that surrounds the consolidation process.

Nevertheless once you have ‘climbed over’ the issues relating to the formation of a shelter and have began to understand its nature – you will almost certainly easily begin to make decisions For this to occur there must be a succession plan about its future – which might be quite sweeping and details of bank accounts etc in its constitution – or may simply involve minor detail. – so that your beneficiaries can ‘pick up the reins’ All of these decisions must be recorded into left by your collision with a bus. ‘a minute’, which we shall complete on your

Following successful completion of the consolidation process, we shall present this minute to you to be signed and added into the documentation of the shelter.

We will ask you to sign that document even Sometimes – the decisions that you make during though we may have to ‘scrawl’ all over it - with the consolidation period – with your eyes now your up to date instructions. much wider open to the possibilities of your We will take that hand amended draft away shelter – will be structural. and turn it into a neat and tidy version II That is to say they will have impact upon the constitution, which will be sent to you by post constitution of your shelter. – in two copies. In that event we will have to go through the whole It is extremely important (as this document is process of revoking the version II constitution the one that controls your entire estate in your – above – (which had already revoked the shelter) that you sign on the relevant pages version I constitution – above) – so that those and (1) retain one copy safely for yourself and two constitutions are replaced by a new - third (2) send one copy to Quill in the post paid - constitution. envelope that will be supplied – at your earliest It is actually possible that this whole process convenience. could repeat itself every year that we come to see It is probably good to register that envelope. you if the circumstances of your shelter change to any great degree.

4 Your version III LLP Constitution

Your version II constitution (above) will then Wherever it is necessary to introduce a deal adequately with all of your wishes relating replacement constitution then you will receive not just the minutes (two or three pages to a hoarding shelter. requiring your signature at their foot) but also During the process of forming your shelter an attached constitution with variations – that structure – however – you will come to receive must be signed in places that we shall mark information about all of the other possible throughout it. benefits that you can access through your shelter relating to capital savings – assets in other parts Each constitution does not necessarily contain of the world – income and profits that could be all of the documentation that proceeded it. directed into your shelter. Because these constitutions will be stored - as There will also be an amount of housekeeping if they were the volumes of ‘a book of life’ that we will not have wished to have troubled – they will not necessary replicate everything that proceeded. you with during the formation of your shelter. © The Quill Group S.L. v2.22, 29K06

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Where they do not replicate previous matters that do still remain current however - it will be made clear - that the new constitution does not revoke what went before it.

We shall ask you for your choice of A, B or C above.

Thus some decisions will revoke previous decisions whereas other parts of previous constitutions will not be replicated forever but will left to lie in the volume (or version) in which they first saw life.

If you choose B or C then rather than using a simple home made letterhead, we shall if you wish it use a B business like letterheading illustrated. The cost of this stationery - for all of the variants which may be necessary is €100 for the life of your Shelter.

It is for this reason that it is important that a properly signed version of the constitution version or volume is stored in perpetuity – somewhere. If you take up The Quill Group Document Bank storage option - then they will always be stored forever in that location – in addition to any other storage arrangements your family may choose to make for itself.

6. Your Shelter bank account

You will be aware that one of the reasons that you consider operating a Shelter bank account - i.e. making your Shelter benign rather than 5. Quill corresponding on hoarding - is because of the practice in Spain to freeze all bank accounts associated with anyone your behalf Quill might now be who dies - for a period of six months - until gift involved in a lot of taxes etc, are paid. correspondence on your This can create considerable difficulties when behalf. There are three accounts that receive income or pension incomes ways that we could deal are suddenly frozen - and utility bills etc, on that with correspondence account become unpaid. A on your behalf : During the consolidation meeting we shall A. The Quill Group can write - on its letterhead therefore discuss with you the necessity for - from its office address in its capacity as your you to operate a Shelter account (or not) and Shelters Company Secretary or Treasurer the issues of retaining your personal accounts etc,. in Spain and the UK alongside Shelter bank B. The Quill Group could write in its capacity accounts. of ‘Secretary’ in your Shelter - from your Most importantly we shall make sure that the address in order that responses go to you and necessary documentation reaches your bank in not ourselves. order that the account can be unfrozen and that C. The third option is that The Quill Group could your bank is aware of your requirements for : write as you/your Shelter - from Quill’s office Debit cards addresses - signing off those letters as one of Credit cards the member in your Shelter. You may feel Current account that the advantage of this is, is that responses will come to ourselves to be dealt with (which Savings account we shall copy you into).

This is regarded as a failsafe option.

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must transfer all of the utilities that you intend to pay from the income into your shelter before there is any question of taxation – into the name of your shelter. This is a bit of a pain-staking task that Quill is happy to take from you at a cost of 100 covering the first – four – main utilities plus 20 per utilities thereafter. If you subscribe to this service, a Quill Client Care employee will queue for hours - and then An account at the London branch (if debate in Spanish – the necessary arrangements applicable) to transfer your utilities from the original owners of the property (your founders) to that of the Euro accounts in Spain shelter. Sterling accounts in Spain They will have to carry with them an endless Euro accounts in the UK array of documents including the escritura and CIF of the shelter which is all included in this Sterling accounts in the UK price.

7. Utilities of your Sheltered property

In the event that you wish to undertake this task yourself – or - in order that you can locate Your property escritura was - of course - the paperwork that you will need to give to the originally in your own name(s). Therefore all of Quill Client Care employee – details about this the utilities – involving : The Town Hall, Rates, paperwork can be found in the separate 4.1 Catastral and IBI (rateable value and rates) your utilities booklet. electricity, your water, your telephone least cost routing, your insurances were in your personal 8. Annual Returns - your name(s) paid from your personal bank accounts. instructions This may now have to change. We do not intend to deal with the annual returns that we shall be making on your behalf at this stage - other than to obtain your instructions Even if you are intending to operate a hoarding that you wish Quill Group to deal with all of shelter you may prefer to have these utilities these matters for you - or not. transferred into the name of your shelter. The cost of us doing everything in connection In the event of you remaining as a hoarding with the annual returns of a hoarding Shelter are shelter, you will pay these utilities from your €500 or £400 per year payable on a yearly basis personal bank account (because if you begin to (generally by direct debit arrangements) at the operate your shelter bank account then those time the first returns fall due. activities will have to become the subject of a Because these returns involve the UK Inland yearly accounting process – and your shelter Revenue, the Spanish Hacienda, the UK become benign or virulent). Companies House and the Spanish Merchantile Registry, they fall at different times of the year.

A Hoarding Shelter

A Benign Shelter

If it is your intention to make your shelter benign in order for it to receive income that you can then protect against taxation – then you absolutely

9. Activities and Licenses - Shelters as investors in Spain.

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10. Your Will. It is crucial that once a shelter is in place - and has settled down (i.e. with all of the fine tuning adjustments made to the succession plan and asset content) that a ‘shelter complimentary’ Will is written - (if the existing Will does not fulfil this requirement). There are three ‘types’ of shelter complimentary Wills that can be written - under English law and under section 9.8 of the Spanish Civil Code depending upon the circumstances as follows : 1. A redirection Will - which gifts any assets that might fall outside the shelter into the shelter. This Will can deal with guardians, trustees and funerals etc, - and thereafter the shelter is the sole beneficiary. 2. A drip tray Will - which takes account of any unforeseen or accidental events that create assets or wealth that is outside of a shelter and therefore not dealt with. This is more likely to follow the path of a ‘pre-shelter’ Will. 3. An intestate testator Will - this type of Will forms a technical BLOCK - sealing off against any outside interference from or in the UK

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A Spaniard in the works. Quill’s in your Shelter - or not approval and authority - to ‘bed in’ your Shelter and prepare it better for what is to come

Quill’s ongoing role in your Shelter You are already aware that your Shelter exists of two legal entities - the Spanish holding chamber entity and its UK (or America, Irish i.e. English speaking) branch entity. As you have aware from the beginning, Quill has been on the inside of your Shelter throughout its formation - at your shoulder - borrowing 100 of your votes - upon the clear terms and conditions that we own no part of your Shelter but are simply your fee paid Secretary.

You are also aware that both of those two entities must be properly maintained - in order to keep the protection of your assets absolutely intact. It is therefore very important that returns are completed - properly and fully and on time.

Quill offers its services in this regard in one or During the formation of your Shelter - and more roles within your Shelter. before any property is put in it, this whole thing is pretty academic anyway because there are no This is a separate ‘commission’ - from you - as the controller(s) of your Shelter - to us - as assets. its secretary - to act under English law in the Now - that has changed - and so Quill would like capacity of trustees fulfilling one or more roles. to be very clear about our purpose in your Shelter - and the extent of our power - and about Quill’s Our Charter absolute pledge to serve you (the founders of the If we agree to act for you in any of the situations Shelter) and only your interests. described below, then we are acting as your We do not wish to be an unwelcome guest at ‘trustee’ - and not your General Manager. your table! Spain does not recognise the concepts of trusts We would like to be very clear about this - but if it did - then a Shelter will be similar to situation. a trust - and we would effectively be your (or What we mean by this is that if you - for example among your) professional trustees. - owned a petrol station business in Spain whilst you were actually living in the UK - or Administrador - if you had a business in the UK whilst you The concept of the Shelter structure is based were actually living in Spain - then you would around the idea that you and / or your children probably appoint a general manager or Director and / or your children’s, children can ‘come and to run that business. go’ - without creating any interruption to the You would be aware that they would be running integrity and security of the Shelter. all ‘day to day’ matters on your behalf and taking This ‘coming and going’ might be simple - and decisions of their own. stress free - or - might require a lot of ‘handing If you returned one day to find that the petrol over’ administration and work. station had been turned into a car wash, you Either way Quill has set its business up so as might be very cross - but you would have to to be available to serve your Shelter’s needs in accept that - at the end of the day - you have put Spain and the UK through many generations. your business into the hands of somebody - to Quill sees its first duty in that regard - with your manage it - to make you a profit. © The Quill Group S.L. v2.22, 29K06

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That is generally the role - and the power - of A PRESIDENT anyone that you appoint to run your business Throughout the process so far, we have - or aspects of it. nominated you (or one of you) to be the president If - however - you agree that Quill will fulfil one and therefore in control of the meetings we have of the following roles, then we do so as a trustee held - in which we have acted in minuting - and whose duty - as we see it - is to implement YOUR pursuing the formation instructions - in our role wishes - absolutely - to the best of our ability of secretary. NOT as a normal General Manager as above.

A GENERAL MANAGER

We shall make no input of our own - but will work entirely from your (mainly written and We have avoided appointing a General Manager until this time - because it has been important occasionally verbal) instructions. that each of us could act independently. Even when we are acting in an area in which we have relevant levels of expertise to make You have had to complete a variety of tasks decisions or promote ideas - WE SHALL NOT on your own - and so have we, which one ACT UPON THOSE - without obtaining your might otherwise have expected to be dealt or co-ordinated with by a general manager - which specific instruction. would have limited our ability to form the We shall never purchase, sell, move or change Shelter efficiently. the shape of any asset of yours within your Shelter without your very specific instruction. If you were to die or to be almost permanently unavailable without having left us instructions, then we should continue to act according to the last instructions we received from you even if that did not seem the best course to be following - countered only by the other duty we see ourselves having - being to preserve your assets to the best of our ability (and - with our Willwriting hat on) - to fulfil your ultimate succession obligations.

A TREASURER

Apart from the banking of the initial capital into the company, there has been no financial Again - you will know from what you have read activity and therefore the role of treasurer has - that your Shelter is managed through four been left unfulfilled. official positions. From the moment your bank account is active

Your Shelter

It is possible for you to be one, two, three or all of - however - someone must wear this hat, (even these - and it is equally possible to you to appoint if they are also wearing other hats). Quill to be one, two, three or all four of these.

THE SECRETARY

It is most likely however that you will only enlist The Quill Group Company Secretary LLP has our assistance in one or two of these roles. acted as secretary fulfilling the above duties These are described in the controlling throughout the formation process. constitution as follows. Subject to any change of instruction from you, PRESIDENT we will continue to carry on in this way - making GENERAL MANAGER all necessary returns etc for the yearly fees that TREASURER we have quoted. SECRETARY ÂŠ The Quill Group S.L. v2.22, 29K06

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We will also meet with you - at least twice in the first year of your Shelter - and at least once a year thereafter - to take your instructions and obtain signatures for returns etc and possibly to obtain your instructions to fulfill other tasks that your Shelter might require, which we shall advise upon in that capacity - as secretary. We will always expect - no matter how much involvement you wish Quill to have in the ongoing life of your Shelter - that the role of President (and if you wish vice president) will be fulfilled by the founders and ultimate controllers of the Shelter - yourself / yourselves.

The cost of Quill acting as treasurer could vary where there is a high volume of monthly activity but is of generally of €1,000 per year. (i.e. €20 or £15 per week).

Quill as your Shelter’s General Manager There are clients who - when they fully understand the potential their Shelter has - to make use of capital they currently have invested - begin to think a lot about these possibilities.

The realisation that you can - at the very least obtain an increased income from the same The President presides over meetings - and it investment - even if still kept with the same is only in your absence that Quill would accept institution they are with today - may lead you to require some management of your affairs. this role. Or further - if you feel that funds that you have could be invested more profitably through your Quill is however prepared - acting in the Shelter in property - or other wholly secure capacity of trustee as described above - to also investments - in Spain. take responsibility as treasurer and / or general You may feel that for your Shelter to own one of manager and / or secretary - IF THIS SUITS the Franchises we will discuss, could bring great YOUR NEEDS. advantages to its door.

Quill Group - Doing more

We do not actively seek these appointments but - nevertheless - many clients simply want to the Shelter to exist and function - without giving it a moments thought of their own - and they have sufficient confidence in Quill’s ability to manage affairs on their behalf - to appoint us.

If when you discuss the options you feel that these - or other possibilities are worth following - then this would be the type of action that we would fulfil on your behalf as your General Manager - (or joint General Manager if there are other affairs in your Shelter that you were personally These appointments could - equally - be of going to direct - in the UK for example). other people or organisations - outside of your In this situation - however - we should have to Shelter. be clear between us about whether you wanted Quill to act as a ‘normal’ General Manager - or to hold the position as a Trustee - based only upon If you wish The Quill Group Treasurer LLP your specific instructions. to act as treasurer then you are appointing us to manage the flow of money into your Quill Holdings LLP fee scales in this regard are Shelter from whatever sources you direct - and generally related to the amount of additional the payment of all bills and accounts - on a profit or asset growth that acting for you in the benign (or possibly virulent basis) along with management of these affairs creates. the maintenance of books and records of annual To assist you in this process Quill has worked accounts and returns to be properly made along with others in the Canaries to create a portfolio with the payment wherever of taxes. of simple - secure - and stable - profit making This might extend - where you take a personal options and ‘tax advantage qualifying’ income from the Shelter - to the maintenance of franchises - that are suitable for Shelter families your personal self declarations in either country. to consider.

Quill as your Shelter’s Treasurer

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Coming soon - ‘Transfiguring’ your Shelter In our next discussion we would like to move from the routine administration of your Shelter - to its future - and way it might require to be positioned - called ‘Transfiguring’ - (i.e. sending down roots) - to deal with that future. Sending down roots (as in trees) means giving your Shelter genuine Spanish ‘activity’. We would - first - like to give you some bearings upon this concept. We hope that you forgive the following graphic ‘space travel based’ comparison - BUT - this can be a fairly dull subject - that needs as much ‘bringing to life’ by the best possible means available to us.

Your ‘Enterprise Space Vehicle’ may need to set meteor shields up - to deflect flying debris (taxes). It may need to set force barriers up - to deflect weaponry targeted at you (sideways disinheritance). There will be purposes and adventures to plan for. (new planets to find and Clingons and the like) All of the careful planning - and thought - that has been put into the preparation for its launch and your Shelters voyage - can be quickly wasted - IF the equivalent of the correct shields and force fields are not set up - to ensure your Shelter’s safe journey through stormy galaxies - (where that applies).

A time capsule ‘rooted’ in Spanish culture As we have repeatedly told you, the concept of Patrimonio Familiar is rooted in Spanish culture - and has been in place for several hundred years.

Enterprise

The Patrimonio Familiar concept is of a ‘time capsule’ - for the benefit of a single family.

There exists an Association of Patrimonio Familiar businesses - with an annual congress and there are political pressure groups acting on behalf of the 2.5 million Patrimonio Familiars in Spain - who seek to retain Preparation for the ‘flight’ and the actual ‘take advantage for family off’ is an important - and expensive aspect of any businesses of which your flight - which can be compared with the period Shelter is now one. of planning for and creating your Shelter. You are aware from That ‘take off’ is soon however eclipsed - by previous literature of the flight itself - which - like the Enterprise - is the situation - of those through time. 2.5 million Spanish There may never be an end to the flight. At least Patrimonio Familiar’s not one that you will see. who employ the bulk The flight itself - however - is most likely to have of the labour force in various phases - depending upon where you Spain - and are responsible for the bulk of all Spain’s ex part earnings. choose to go - and for what purpose. For the purposes of the next few minutes please compare the formation - launch and future of your Shelter - with a voyage on Starship Enterprise (Captain Kirk and all).

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The Birth of Your Shelter | Part Five: Consolidation

Quill’s ambition is that your Shelter can join the An acceptable - but ‘benefit wasting’ - alternative to this is to be a hoarding Shelter - and do 2.5 million doing the same job. absolutely nothing - other than make completely Employing people in Spain dormant returns each year. Creating overseas income An unacceptable (in our view) alternative is to If yours - and many other Shelters were to stand be a total tax dodger. out - as foreigners - escaping from their own - (as well as all Spanish) - taxes - AND - not Here is a general guide to your behaviour as a doing anything constructive in Spain - then Shelter : - your Shelter may begin to attract (unwanted) Yours as a Hoarding Shelter attention. In that situation where your Shelter exists to If however there are sufficient - totally genuine ‘hoard’ (or hold) family assets and no more than and supportable - aspects of the life of your that : Shelter - so as to make it undistinguishable from other genuine businesses that are in a Spanish 1. Do not use your bank account - (even to inject additional capital with which to maintain the Shelter - then - you and your family can expect property and other assets in the Shelter). at least another 500 or 600 years of ‘supported and applauded’ of Sheltered life. 2. Do not trade through the Shelter.

Acceptance

3. Do not derive an income from the Shelter.

One of the series of decisions that we will help you make - once you are ‘in flight’ is to trim your Shelters ‘booster’ and ‘ailerons’, so that your Shelter is - as much as possible indistinguishable from other Spanish Shelters (i.e. orange groves and vineyards).

Yours as a Benign Shelter In a situation where your Shelter receives (though not by ‘active’ trading) sufficient funds (say up to €30,000 per year) to maintain its assets :

1. Use your Shelter bank account - even to inject additional capital - which to maintain the The important measures that we will work with property and other assets in the Shelter. you to take - in this regard are : 1. To obtain the necessary licenses for legitimate 2. Do not ‘trade’ - but direct cash income into your Shelter - though not beyond ‘reasonable’ activities that you can be said to be engaged levels. in. 2. To make all returns (tax and Merchantile and 3. Take some personal income from the Shelter to offset 2. property) correctly and promptly. 3. To pay some (as little as need be) tax each year to Spain.

Yours as a Virulent Shelter In that situation :

4. (where practical) To employ someone - if only 1. Trade at any level. yourself - as quickly as possible and to grow that. If not then to attract foreign spending in 2. Use your bank account - to inject additional capital with which to maintain the property Spain that employs others here. and other assets in the Shelter - and create as 5. To make it clear - and supportable - if anyone much profit as you like. should want to know - what benefit your Shelter brings to Spain (as well as to your 3. Derive one or more incomes from the Shelter. family)

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The Birth of Your Shelter | Part Five: Consolidation

Consolidation There will be time delays after your Shelter is formed - and before your bank account is active your utility accounts are transferred- and before your Shelter must make its first return. Therefore there is time for you - and Quill - to complete your plan - in detail before any returns are made. Thereafter - we shall ask you to file a revised plan each year - ahead of the yearly returns Flying through time and these are carefully considered in the ‘annual We have already likened your Shelters journey review’. - through time - as a flight in a space exploring Setting a course through time vehicle - like the Enterprise. Just as with that flight - you can make changes - We do not want to push the process of ‘likening’ at any time - and as often throughout the period your Shelter with the Starship Enterprise - but - to suit your circumstances - which might - that simile does help us explain one further concept. change at any time. As we have said before - your Shelter is similar Planning conferences to a Starship Enterprise - in that it is a ship that For a ‘risk free’ flight however - you should will take a journey through time. ALWAYS keep Quill aware - in advance - of the Just as with the Enterprise it had to be built activities and status of your Shelter. prepared - for flight - and then launched - which As PART OF the yearly maintenance fee of €500 is the formation - in the case of your Shelter. / £400 - to Quill - we hold a conference about your Shelter with you - and then - with a firm of Transfiguration specialised tax advisors in Spain. Once your Shelter is away from its launch pad Out of this yearly conference process comes a personal advice and information notice to you in the light of current - and changing - tax issues in Spain.

there is then another - hectic - period - whilst the course for the destination is set - including direction, speed - trimming the thrusters and putting up shields and the like - which is consolidation in the case of your Shelter.

Planning questionnaires

There are two documents - that are crucial to The journey this process - which should be completed at There then comes a time when the ship is the relevant times (so long as you are fully clear on course and everybody can climb into their chambers for 100 years sleep until they arrive at about your intentions). their destination. Document One (PLANNING) is required before - during - or soon after - your Shelter order has Before then however the crew would be bound been taken - or when has been constructed and to meet to discuss and report upon ‘the journey’ to be made. set in motion. The Second (REVIEW) questionnaire arrives between six and nine months after the creation of your Shelter - and yearly thereafter - as we deal with your Shelter’s various yearly returns. © The Quill Group S.L. v2.22, 29K06

In the Shelter terms the second period of time - after the formation and after (this) consolidation - but before the journey sets in - is called TRANSFIGURATION.

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The Birth of Your Shelter | Part Five: Consolidation

The transfiguration of your Shelter involves a whole series of actions that are taken on our part (or your part). These are based upon (1) your increased understanding of your potential of your Shelter particularly with regard to the manner in which it can handle income and (2) your up to date decisions on what you want from and expect from your Shelter in the foreseeable future. In our next meeting with you - therefore - we must help you to understand what is possible and discuss and receive your decisions and instructions. During this period your Shelter will ‘transfigure’ from its Tontine shape - when it was built - into its Castell shape - when everything above has been accomplished. As a result of this process you may want to re-locate some other of your assets into Spain - or even re-shape some of your assets. These possibilities are discussed in advance in the next chapter - Shelters as ‘Investors in Spain’

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The Birth of Your Shelter | Part Five: Consolidation

Shelters as ‘Investors in Spain’ Families who have now established a family shelter to protect their assets from Inheritance Tax often - next - want to take a good to look at how they can make maximum use of the tax advantages that a shelter provides - sometimes with a thought to re-position their existing investments.

one and a half - or even two - houses. The sum total of all of these factors - added to other - more technical issues - can make a significant difference to the power of your assets and income -whenever and wherever those can be drawn in - and made to work - through your shelter structure.

This sometimes (if the relevant assets create a fair amount of income) involves Quill transfiguring The ‘mirage’ of a ‘life of free tax’ in their shelter into a fully qualifying ‘VIRULENT’ Spain shelter - with full tax advantages and benefits. It is worthwhile mentioning here that - for a Once fully transfigurated those benefits of a variety of reasons - including Spain’s previous seeming reluctance to collect taxes - many Castell shelter can relate to : people have enjoyed many years in Spain PROPERTY PURCHASES without paying anything like the levels of taxes There need be no stamp duty on the purchase that actually exist in law. of properties in the Canaries saving an average €20,000 per property purchased by comparison with what people ‘in the real world’ (i.e. outside of a shelter) have to spend. YEARLY TAX No annual wealth tax is payable upon properties - reducing their overhead cost. INCOME AND PROFIT It is possible - by applying the right fiscal policies to your family’s life - within its shelter - to pay taxes at around 30% upon only 10% of your Reading the riot act profits from earnings. This means an effective There are two points that we have to raise about tax rate of 3% on profits and income. this : CAPITAL GAINS 1. Times - they are a changing. Spain is still some way behind the UK in property prices - yet has similar (if not greater) stability. Burdened among other things with the cost of the demands - of its newly arrived residents from all over Europe - for a sophisticated infrastructure Developing assets in Spain and medical and other civil services, Spain is This makes investing in property in Spain to be making significant - if not strenuous - efforts to worthwhile looking at closely from the point of gather in its taxes. view of investment gain. Spain is continuously applying more people, Those with funds in the UK still have the historic more resources and becoming involved with (recent past) inflation factor very much on their more co-operation with other countries in order side in that money that buys one house in the to collect tax. UK - when brought over to Spain - can still buy © The Quill Group S.L. v2.22, 29K06

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The Birth of Your Shelter | Part Five: Consolidation

It would be a mistake to believe that the clients into the direction of sensible and sound next 10 years will see remotely like the tax business opportunities in Lanzarote of a variety of types that can : leniency of the last 10. 2. Take what is LEGALLY on offer: If a shelter is correctly and properly and honestly run, the levels of taxation can be so low, that the only advice that we can give is to BE LEGAL. If you are currently avoiding all tax then nothing your shelter can do will improve your tax position ! If it will inevitably worsen it - because our recommendation is that you always pay some tax.

GENERATE INCOME - safely - from nest eggs or spare capital - for the benefit of a shelter CREATE SAFE CAPITAL GROWTH - on savings and nest eggs - that is protected by the shelter RAISE OUTGOINGS - create often very useful and totally genuine outgoings and expenses which counter balance profits - and therefore reduce taxes in a benign shelter condition (and give the fiscals more flexibility to deal with significant profits in a virulent shelter)

3. Peace of mind is almost without price. There is little point living an idyllic life in the sun with a constant worry that an inspector may bang on your door - resulting in penalisation going back many years for - for example - illegal rental income, stemming from your property being advertised on the Internet. You will know from your own use of ‘Google’ - just how easy it is today for Spain to find every single property that is advertised on the Internet.

Graded risk factors

Each of those that is not already a properly Anything - other than putting money into a declared income offers Spain a simple and BRITISH bank - at 4% interest - has obvious immediate opportunity to gather in taxes that risk. is badly wants. Saving money as above however also involves There are many other examples of new technology a risk. making Spain’s intentions very easy. The risk here is that capital will shrink - in its buying power - at a faster rate than the income What is the ‘Shelter Investors in being received increases it.

Spain’ programme?

Quill has literally thousands of clients in Spain In fact - capital in an ordinary savings account who have almost identical ambitions in this over a period of 10 years - for example - currently shrinks to around half its value - even including regard. the income. To a man - and woman - they want to ‘work’ their assets and income - that they currently This ‘risk’ is often completely overlooked by nest egg savers and is rarely pointed out to the have - so as to earn more and be taxed less. client - clearly - by the savings institutions.

Enliven the Shelter environment

The investors in Spain programme has four There is therefore a lot of common ground grades of risk : from which Quill is able to organise - (or point) © The Quill Group S.L. v2.22, 29K06

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The Birth of Your Shelter | Part Five: Consolidation

ZERO RISK - the first possibility is to remove capital that is saved in your personal name in UK building societies or banks - where the income you receive is reduced by the deduction of tax - and to reinvest that same money in the same organisation through your shelter - without tax being deducted at source. This typically increases a 4% return to 5.5% or even 6%. VERY LOW RISK - removing nest egg savings from a sterile environment and putting them into a property ‘portfolio’ in Lanzarote or several other places in Spain that does nothing more than grow - with inflationary forces.

There is no income (because all income from touristic renting is reinvested in maintaining the asset) - but - over a 10 year period historically - should double or treble the capital sum. Capital can be employed in this way for three months to 30 years or more. Through very simple arrangements made by Quill on behalf many of its shelter owners, it is possible to directly own ‘a slice’ of a superb property portfolio along with other shelter owners - so that the properties acquired for this purpose can be in the higher price - and much higher rising - bracket.

It is possible to make convenient size investments into the assets and business of restaurants, museums and the like, which usually creates a medium yield as well as strong growth in capital. There are then stake holder benefits such as free meals etc,. Information about the ‘culture’ portfolio is available upon request. HIGHER RISK - A TRANQUILL LIFE - in order to meet the needs the large number of shelter owners - requiring that their essentially dormant shelters can obtain virulent status - (which brings with it massive potential tax benefits) that can be applied to other aspects of their life, Quill has worked with others to create the TRANQUILL LIFE group - involved in core tourists services such as pool maintenance, villa maintenance and cleaning. A €10,000 to €25,000 investment into a Franchise - owned by your shelter - generates a weekly or monthly income typically of €300 to €500 per month - and forms the qualification for a fully virulent shelter which can then take significant and substantial advantage in other areas. The most important of these additional tax exemptions is often seen as being the ability to buy property with no stamp duty saving the cost of the Franchise in a single €300,000 property transaction. Also - legitimate business expenses become introduced into the tax equation - creating big offsets that benefit the overall shelter tax position. Details of your shelter owning a TRANQUILL LIFE Franchise with all its benefits are available upon request.

As a consequence it is practical to use as €25,000 - €50,000 - €100,000 in convenient ‘blocks’ - without having to have sufficient Discussion in detail capital to purchase an entire property. The Quill ‘customer relations’ team will make Further information upon the TAMBOR contact again soon to discuss ‘Transfiguration’ in general - and anything on this subject that portfolio is available upon request. you wish - in detail. MEDIUM RISK (IN CULTURE) - the culture of Spain is very important to it - and fascinates Please mention it - when they telephone for an appointment - if you would like to go into any of tourists. the above ‘projects’. © The Quill Group S.L. v2.22, 29K06

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Quill Assets | The Birth of Your Shelter | Part 5:01 of 6

A Quill Group Company

Part Five:01: Consolidation Forms

QUILL ASSETS, Registered Address: Harbro House, Crown Lane, Denbigh LL16 3SY United Kingdom. Reg No. 2239135

The Willwriters Association

The Association of Lawyers

ÂŠ The Quill Group S.L. v2.22, 29K06

The Birth of Your Shelter | Part Five:01: Consolidation Forms

Consolidation Meeting Agenda 1. The Quill Group in your Shelter - past - present - future 2. Your Shelter documentation - your copy Escritura in Spanish - Mercantile and Property Register Fiscal representative Escritura in English - control version Definitivo CIF Document storage 3. Your version II LLP Constitution (operating agreement) inclusive of : Personalisation Bank account details - UK and Spain Succession Plan Schedule D 4. Corresponding on your behalf - from Quill From address To address Format 5. Your Shelter bank account In Spain - € In Spain - £ In the UK - £ In the UK - € 6. Utilities Town Hall - Electricity - Water - Telephone 7. Yearly Returns and Accounts Hoarding Shelter - €500> Benign Shelter - €800> Virulent Shelter - €1200>€2400 8. Activity and Licenses - Shelters as investors in Spain Deposit / investment through Shelter On island investments for growth On island investments for growth and income On island investments for high income 9. Your Will 10. The next - ‘transfiguration’ - meeting Date / Time Issues to be considered

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The Birth of Your Shelter | Part Five:01: Consolidation Forms

Post Consolidation Instructions QUILL GROUP 1a. I acknowledge that the formation process that I have paid for is now complete and I wish Quill to resign from the Shelter OR 1b. I acknowledge that the formation process that I have paid for is now complete - and I wish Quill to continue to act in the role as secretary as described under the constitution in return for the fee scales they have quoted.

PRESIDENT 2a. Since the formation of the Shelter I have been its named president and chairperson of meetings and it is my intention to remain in that capacity. OR 2b. Since the formation of the Shelter I have been its named president and chairperson of meetings - but I propose to appoint Quill Holdings LLP in that capacity hereafter as set out in the Part Five document.

TREASURER 3a. I acknowledge that the Shelter constitution requires that someone fulfils the role of Treasurer. I will make those arrangements without assistance from Quill OR 3b. I wish to appoint The Quill Group Treasurer LLP to fulfil the function of Treasurer in a manner and on the basis of the fee set out in Part Five and acknowledge that I must provide Quill with a complete set of instructions as regards the funding I shall be organising into the Shelter in this regard.

GENERAL MANAGER 4a. I acknowledge that the Shelter has, since its inception, never appointed a general manager but that each individual designated member has had tasks to perform and authority to perform them in their own right. It is my intention for the time being to leave those matters as they stand today. OR 4b. It is my intention to appoint a General Manager of my own. OR 4c. It is my intention to appoint Quill as General Manager and acknowledge that I shall expect Quill to act as if they were trustees - to manage assets and investments in the Shelter on my behalf in the best interests of my family and beneficiaries.

ÂŠ The Quill Group S.L. v2.22, 29K06

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The Birth of Your Shelter | Part Five:01: Consolidation Forms

DOCUMENT STORAGE 5a. I acknowledge receipt of a copy of my Shelter documentation - and of the receipt of Quill Document Bank LLP for the original copies held by them in secure storage. OR 5b. I acknowledge receipt of my original Shelter document and I accept full responsibility for the safe storage of those and that copies will be stored by Quill Document Bank. OR 5c. I do not require the services of Quill Document Bank

Signed .............................................................................................................. On behalf ofthe Shelterâ&#x20AC;&#x2122;s founding family

Date ........................................

Signed .............................................................................................................. On behalf of The Quill Group

Date .......................................

ÂŠ The Quill Group S.L. v2.22, 29K06

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The Birth of Your Shelter | Part Five:01: Consolidation Forms

Shelter consolidation services Order form QUILL GROUP - ONGOING SERVICES (see terms and conditions below)

Please check the services required. QUILL GROUP COMPANY SECRETARY LLP will carry out the duties of secretary

€500 / £400 p.a.

QUILL GROUP TREASURER LLP will carry out the duties of Treasurer

€1000 p.a.

QUILL HOLDINGS LLP will carry out the duties of General Manager

per agreement

QUILL DOCUMENT BANK LLP will store Wills and other family and Shelter documents

€50 p.a.

THE QUILL GROUP S.L. will re-organise all of the relevant Shelter utility bills

€100

E+W+Ay

Note: €100 covers Electricity, Water & Town Hall (Ayuntamiento)

_______________

Other utilities cost €20 each. Please provide paperwork shown in FOUR-02

_______________ _______________ _______________

THE QUILL GROUP S.L. will apply for the necessary license in respect of my Shelters profitable activity(ies)

€100

TOTAL DUE

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ÂŠ The Quill Group S.L. v2.22, 29K06

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The Birth of Your Shelter | Part Five:01: Consolidation Forms

Extraordinary General Meeting Questionnaire The figures below should be either in euros throughout - or very clearly marked where they are in pounds or other currency and can be general (i.e. do not have to the penny). 1. What assets do you have in Spain ? Fixed - Property

€.................................

Unfixed - Liquid

€.................................

2. What Spanish bank mortgages do you have on these assets ? € ...................................with ........................................................................................................ 3. What income (total - with breakdown) do you currently bring into Spain ? € ...................................from ....................................................................................................... 4. What income (if any) could you bring into Spain (IF it were tax advantageous to do so) ? € ...................................turnover ?

5. What business are you already engaged in Spain ? - or - What business might you be engaged in Spain in the future ?

7. What business are you engaged in, in the UK ?

8. What is your work or professional background ?

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The Birth of Your Shelter | Part Five:01: Consolidation Forms

9. What assets do you have elsewhere that you do not anticipate bringing into your Shelter ?

10. In the coming year (1 Jan / 31 Dec) what will happen in your Shelter ? What do you anticipate will occur by way of movements of capital assets or income in and out of your Shelter in the current 12 months (1 Jan / 31 Dec).

Signed.....................................................................................................

Date ..................................

Name ......................................................................................................

Signed.....................................................................................................

Date ..................................

Name ......................................................................................................

ÂŠ The Quill Group S.L. v2.22, 29K06

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The Birth of Your Shelter | Part Five:01: Consolidation Forms

Yearly Shelter Review

The figures below should be either in euros throughout - or very clearly marked where they are in pounds or other currency and can be general (i.e. do not have to the penny).

Planning Questionnaire 1. What assets do you now have in Spain ? Fixed - Property

€.................................

Unfixed - Liquid

€.................................

- at today’s value?

2. What Spanish bank mortgages do you have on these assets - now outstanding? € ...................................with ........................................................................................................ 3. What income (total - with breakdown) do you currently bring into Spain ? € ...................................from ....................................................................................................... 4. What income (if any) could you bring into Spain (IF it were tax advantageous to do so) ? € ...................................turnover ? 5. What business are you already engaged in Spain ? 6. What business might you be engaged in Spain in the future ? 7. What business are you engaged in, in the UK ? 8. What is your work or professional background ? 9. What assets do you have elsewhere that you do not anticipate bringing into your Shelter ?

10. In the past year (1 Jan / 31 Dec) what happened in your Shelter ? Please detail movements of assets and money, in and out of the Shelter during the last complete year (1 Jan / 31 Dec).

11. In the coming year (1 Jan / 31 Dec) what will happen in your Shelter ? What do you anticipate will occur by way of movements of capital assets or income in and out of your Shelter in the current 12 months (1 Jan / 31 Dec).

Signed. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . © The Quill Group S.L. v2.22, 29K06

Date .................................................

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ÂŠ The Quill Group S.L. v2.22, 29K06

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ÂŠ The Quill Group S.L. v2.22, 29K06

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The Birth of Your Shelter | Part Five: Consolidation

1. The Quill Group is a United Kingdom business formed and first registered in December 1986. 2. The formation of Shelter structures is organised by The Quill Group Company Secretary LLP from its UK offices assisted by The Quill Group Treasurer LLP - and in Spain by Quillâ&#x20AC;&#x2122;s Abogado and Fiscal Advisors. 3. Ongoing maintenance services of making annual returns etc. - are provided by The Quill Group S.L., from its offices in Spain with help from its Abogado and Fiscal advisors The Quill Group Company Secretary LLP and The Quill Group Treasurer LLP in the UK.

ÂŠ The Quill Group S.L. v2.22, 29K06

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