PRACTICAL CASE:

I NEED TO APPLY FOR A SPANISH NATIONALITY FOR MY CHILD WHO LIVES IN PAKISTAN. HOW CAN I DO IT?

At Gunnercooke LLP we have seen a noticeable amount of enquiries from Spanish-Pakistani families where one of the members of the family is Spanish and the other one is usually from Pakistan (or another country). In most of those cases, the family lives in the UK and has a son or a daughter abroad (either in Spain or in Pakistan) waiting to obtain a Spanish nationality in order to reunite with the family.

The normal practice is for the parents of the child to apply for the minor´s Spanish nationality at the Police station in Spain or at the relevant Consulate abroad (for instance Islamabad). However, very often the minor lives abroad (Spain or Pakistan) and the parents cannot travel abroad because they are working in the UK. In those cases, one of the parents or a third person can apply for the minor´s nationality by way of a notarial power of attorney.

See below the possible scenarios and their solution:

A.- Parents and minor living in Spain.- They can apply for the minor´s Spanish nationality at the local Police Station.

B.- Parents and minor living in Pakistan.- They can apply for the minor´s Spanish nationality at the Spanish Consulate in Islamabad.

C.- Parents and minor living in the UK.- They can apply for the minor´s Spanish nationality at the Spanish Consulates in London and Edinburgh.

D.- Parents living in the UK and the minor living in Spain with relatives.- The parents can grant power of attorney to each other to apply for the minor´s nationality in Spain or alternatively, grant power of attorney to a third person to enable him/her to apply for the minor´s nationality in Spain.

E.- Parents living in the UK and the minor living in Pakistan with relatives.- The parents can grant power of attorney to each other to apply for the minor´s nationality in Pakistan or alternatively, grant power of attorney to a third person to enable him/her to apply for the minor´s nationality in Pakistan.

 

It is therefore possible to find a solution in scenarios D and E. The Spanish desk at Gunnercooke LLP has experience in drafting the necessary powers of attorney to enable one of the parents or a third person to apply for the minor´s nationality at the country where the minors is residing.

Obviously, our expertise is restricted to drafting the power of attorney. We do not advise on Spanish nationality applications but we can certainly help with the power of attorney and save the families the hassle of having to fly to the relevant country when their normal life is taking place in the UK.

For further information please contact

Antonio.guillen@gunnercooke.com

07872808598

 

 

Have your clients paid high Inheritance or Gift taxes in Spain in the past?

Gunnercooke

Pursuant to the European Court of Justice´s decision of the 3/9/2014 they could be entitled to ask for a refund

The Spanish inheritance and gift tax is a national tax but the Spanish Government transferred it to the regional bodies (autonomous communities), who have autonomy to legislate and collect the tax. The autonomous communities have legislated a number of tax benefits that are applicable to taxpayers, resident in their regions.

The key point is that most of the Autonomous Regions have introduced tax benefits to their residents, i.e. in the Balearic Islands (Mallorca, Ibiza or Menorca) the inheritance transfers between immediate family members, if they are residents, are taxed with a maximum of 1% in most estates.

The problem is when we are talking about non-Spanish residents because the tax is not transferred to the regional bodies and the state rules apply without the said benefits. This implied that in the past a person who was not resident in Spain was paying a higher Inheritance tax than a person who was resident in that country. This was clearly a discrimination within the EU and many groups of affected individuals and professionals complained before the EU Courts.

In 2007 the European Commission sent a warning to Spain about a potential incompatibility between the Spanish inheritance and gift tax rules with Articles 21 and 63 of the TFEU and Articles 28 and 40 of the EEA. The Commission formally requested Spain on the 5th May 2010 and 17th February 2011 to take action to ensure compliance with EU rules. As Spain failed to take action, the Commission decided to take Spain to the CJEU and the European Court of Justice declared in its Decision dated 3th of September 2014 that this legislation breached the free movement of capital and it was contrary to the European laws. Spain was therefore forced to amend its legislation in that way.

Knowing that at present the inheritance or gifts between non-Spanish residents have the same benefits that residents have, the key questions are:

What about the taxes already paid by non-Spanish residents before that European Decision? Can we claim a refund for the excessive taxes?

The effects of the CJEU Decision 3/9/14 are not temporary limited and therefore if your clients have paid the inheritance or gift tax in Spain as a non-resident they should be able to claim for the reimbursement of the excess paid.

We would recommend contacting a Spanish Lawyer to review the Inheritance or Gift taxes already paid by your clients in Spain before 2014, and more importantly, if your clients are going to pay taxes in the following months, a Spanish Lawyer will also help them to decide the best way to minimise taxes, without the need to appeal for a refund.

On the other hand, we would also recommend your clients when buying in Spain, to consider the different tax rates and take into account the different regions and their tax rule, before deciding where to buy. We all know that laws can change, but why do not take this into account if it can help clients to save some money?

Claudia Font & Antonio Guillen

Spanish lawyers at gunnercookellp

1 Cornhill London EC3V 3ND 53 King Street Manchester M2 4LQ

 

E-mail: claudia.font@gunnercooke.com       E-mail: antonio.guillen@gunnercooke.com

D: 07788585115                                                  D: 07872808598