Gunnercooke’s Spanish desk grows with another Spanish lawyer

Gunnercooke

 

 

 

 

 

I am glad to inform that Claudia Font has joined our law firm Gunnercooke LLP to form part of the Spanish desk. Claudia is qualified in Spanish law and is registered to practice in both Spain and England. She is originally from Barcelona and will be based in the North West of England helping to consolidate what is probably the largest Spanish desk in the North of England. Myself and Claudia will also travel regularly to London to meet clients in the capital and provide services to UK clients both in the North and the South.

For further information on the team see below.

Gunnercooke LLP                                                   

SPANISH DESK

SERVICES FOR INDIVIDUALS

About Gunnercooke LLP

We are a full service legal firm, and our model is very simple:

  • We comprise solely senior lawyers – every lawyer has minimum 10,000 hours practising experience, and our clients not only benefit from the expertise this brings, but also from the authority it commands
  • We provide certainty and transparency over the cost of our services, providing fixed fee quotes that will never change
  • 95% of our lawyers have spent time in-house or in business, developing a commercial edge to their legal advice

Spanish legal services for individuals

 Gunnercooke LLP is probably the only law firm in the North of England with two qualified Spanish lawyers able to advise individuals in respect of their assets and investments in Spain.

The Spanish desk at Gunnercooke LLP is formed by Antonio Guillen and Claudia Font. Both of them are qualified to practice Spanish law and duly registered with the Law Society of Barcelona, Spain as well as the Law Society and the Solicitors Regulation Authority in England and Wales.

Antonio and Claudia are primarily based in the North West but have clients from all around the UK and can therefore advise UK clients regardless of their location. They also hold regular meetings with clients in the South through our London office.

The Spanish legal services provided by the Spanish desk are the following:

  • Sale and purchase of residential properties
  • Will drafting and estate planning
  • Administration of estates
  • Powers of attorney
  • Property disputes and litigation
  • Mortgages
  • Debt negotiation and Insolvency
  • N.I.E. numbers

About the team      

Antonio Guillen
Antonio Guillen

                                                            

 Antonio Guillen is a dual qualified Spanish lawyer and English solicitor specialized in Spanish civil law, in particular property and probate matters in connection to assets in Spain. He gives regular lectures on Spanish law to UK solicitors, STEP practitioners and Notary Publics and is known as a point of reference for cross border probate matters between UK and Spain. Antonio is also the Honorary Consul for Spain in Manchester and helps the Spanish Consulate and Embassy with certain delegated tasks in respect of Spanish nationals living in the UK.

Claudia Font
Claudia Font

Claudia Font is qualified in Spain, member of the Barcelona Law Society and also authorized by the SRA to practice in England and Wales (Registered European Lawyer) with over 13 years of professional experience. She specializes in civil law (property, family, litigation and corporate law, in connection to matters of Spanish law). She is well experienced with the process of transferring Spanish assets after divorce proceedings with the British and international clients, as well as property and litigation.

Gunnercooke LLP

 

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

T: 03330 143 401 www.gunnercooke.com

Santa Ana del Monte. A story of successful recovery of deposits paid to an insolvent developer in Spain

Construction site photo

 

 

 

Litigation is never an easy thing.

When I was a trainee lawyer in Spain, my boss, who was a walking enciclopedia and knew every single law in Spain, used to tell me:

“Antonio, it is always better to reach a bad settlement than entering into a long but good case in Court because litigation is, regardless of the outcome, always exhausting and some times frustrating”.

I always followed that advice and tried to settle where possible (provided that the client was happy with the settlement reached, of course) but sometimes a settlement is not possible because there is no intention to settle from the other party or simply because there is no money to settle. This is what happened with a development that I know quite well in Spain. The development was called Santa Ana del Monte in Jumilla and it was supposed to be a very interesting development with nice properties and golf courses until the recession put a halt on the construction and the developer had to file for administration, then eventually after 5 years of failed negotiations, liquidation.

When I say that I know the development quite well is because I had more than 100 clients who instructed me and a barrister litigator that we use in Spain called Emilio Lucas Marin (another very well versed lawyer who receives my admiration) to represent them in the insolvency procedure and try to get their money back. After 5 years of talks, legal writs, claims, appeals and some eventual sleepless nights the developer filed for liquidation and the clients were left with barely no chances to get their deposits back, deposits that ranged from 30,000 Euro to 100,000 Euro. We then explored a possibility that had been explored in only a few cases which consisted of issuing legal proceedings against the bank that had received the deposits. This kind of action could be taken on the basis that Spanish law 57/1968 seemed to state that when a bank receives the payment made by an individual towards the construction of an off-plan property, that bank could be held jointly liable if the developer does not supply a bank guarantee to guarantee the safety of that deposit. This is exactly what happened in Santa Ana del Monte. Purchasers paid their deposits into a bank account of a Spanish bank, the developer used the money and in most of the cases failed to secure the deposits with a bank guarantee. On this basis, we studied the possibility of taking action against the said bank. Other law firms did the same and others opted for issuing legal proceedings against all the banks that had provided bank guarantees for that developer in the past.  We decided to take action solely against whichever bank received the deposit in that particular case and it worked.

3 years down the line we have received more than 20 positive judgments where the Judge has ordered the bank to repay the deposit in full. Very often those judgments also order the bank to pay legal interest and legal costs. In other cases the Judge has been more prudent and not awarded legal fees but generally there is an order for payment of interests attached to the order for full refund.

We still have several clients who are litigating against the bank but looking at the current trend of Judges ruling in favour of the purchaser/client the odds are clearly in favour of the client.

What is the moral of this story? Well, first of all I still believe in the advice given by my first mentor in the legal profession. When dealing with a dispute always try to settle if possible. When this is not possible then litigate but make sure that you have sufficient legal grounds to win. And if by any chance you have paid a deposit for an off plan property and this was never built you may have a case against the bank that received your deposit. If that is your case, speak with a lawyer to see if you have a strong case against that bank as this may be your only chance of getting your money back.

In memory of Miguel Viladés (R.I.P), a superb lawyer and a gentleman who, together with his son Alberto, mentored me and initiated me into the legal profession.

 

 

Spanish Festival “Festejar” is back in Manchester

Festejar

 

 

 

 

 

They say second parts are never as good as the first one but there are several examples that prove that saying wrong. The Godfather II was a much better than the first film. The same happened with Empire Strikes Back, Superman II and X-Men II. Hopefully we will be able to say the same about Festejar, the Spanish festival coming this weekend to Manchester for the second time. I am pretty sure that it will be better than last year, which incidentally was quite good.

See below a TV interview with some information on the Festival.

https://youtu.be/6YrczcaEHdM

 

INFORMATIVE NOTE ABOUT THE ROLE OF THE HONORARY CONSUL OF SPAIN IN MANCHESTER

Capture

 

 

 

 

 

 

 

1.    Honorary Consul

The Honorary Consul of Spain in Manchester is Mr. Antonio Guillen and his office is situated in the law firm gunnercooke LLP on the following address 53 King Street, Manchester, M2 4LQ.

2.    Role of the Honorary Consul

The Honorary Consul is not a Consul General and therefore he acts with powers delegated from the consulate from which he depends, in this case the Consulate General of Spain in Edinburgh.

The Honorary Consul can do the following:

–       Assist in the issue of passports for newborns

–       Assist in the renewal of passports for minors under 12 years old

–       Assist with the NIE numbers for British

The Honorary Consul is not able to do the following:

–       Renew the passport for those who are more than 12 years old

–       Issue VISAS

–       Issue criminal records centificates

–       Give faith of the life of pensioners

–       Issue or renew DNI documents

–       Register Spanish nationals in the census

3.    Opening times

14.30-17.00 Wednesday and Friday. Appointments only.

To arrange an appointment call +44 (0) 7872 808 598

Or email antonio.guillen@gunnercooke.com

Due to the number of calls and to the fact that it is an Honorary Consulate without staff that can be in charge of the phone, please contact us ideally by email.

From 2014, it is compulsory for both parents to be present for the issue or renewal of a passport.

 

I am an Executor on a Spanish estate. Do I still need an N.I.E.?

The answer is simple: Yes.

Any person appearing in a Will that is going to be used for the administration of a Spanish estate, whether this is an English or a Spanish Will, requires a N.I.E. number. Obviously, this applies to those who inherit the asset but also to those who are not beneficiaries under the Will but have been appointed as Executors of the estate. In the event of several executors there is no need to get N.I.E. for all of them unless they have been appointed in a joint basis whereby all their signatures are required for any document with legal implications.

The above means that if Joe Bloggs died with no Spanish Will but he had an English Will that covered all his assets around the world and in that Will he appointed his brother and his trusted solicitor as Executors, both of them will need a N.I.E number and both will have to fly to Spain to attend the signing of the deed of inheritance at the Notary’s office. If this is not convenient, they can give power of attorney to someone based in Spain (ideally a lawyer or someone they trust) to sign the deeds on their behalf.

With regards to the N.I.E. this can be obtained in different ways:

– In person at the local police station in Spain

– In person at one of the Consular offices or delegations of Spain in the UK ( Aberdeen, Edinburgh, Leeds, Liverpool, London or Manchester)

– By way of granting power of attorney to someone based in Spain

For those who are not aware, there is no need to appoint an Executor in a Spanish Will as the heir/beneficiary has the same powers as a UK Executor. This is a mistake that many people make when signing their Spanish Wills. They appoint Executors when these are not necessary. Having said that, there is no harm in appointing Executors on a Spanish Will or in an English Will that is going to be used in Spain. It is just not as necessary and important as in the UK. In the end is up to the Testator or Testatrix to decide.

 

 

Honorary Consulate of Spain in Manchester

Picture with Patricia Roldan

CONSULADO HONORARIO DE ESPAÑA EN MANCHESTER

Antonio Guillen Hederich is the Honorary Consul for Spain in Manchester since June 2013.

An Honorary Consul is a person who voluntarily provides help assuming the functions that the General Consulate delegates on him. In the case of Antonio, his functions depend on the General Consulate of Spain in Edinburgh.

In the UK there are two General Consulates, one in Edinburgh and one in London.

Antonio’s area of jurisdiction is North Yorkshire, West Yorkshire and Greater Manchester and his main tasks are to help with the first passports and passports renewals of Spanish children in the mentioned area that are less than 12 years old. For that, he gives faith that he has seen the minor and the parents stamping and signing the corresponding forms and he checks that the documentation is ready to be sent in a special delivery to the Consulate in Edinburgh that will process the passports.

Antonio also can assist in certain circumstances with the NIE applications (Número de Identifidad Extranjero) for those British individuals that need a tax identification number for any official transaction in Spain.

The Honorary Consulate is located in the building of gunnercooke LLP law firm in Manchester.

As well as the Honorary Consul, Antonio is a dual qualified Spanish lawyer and English solicitor working for law firm gunnercooke LLP. Together with his usual Notary Public, Antonio can prepare powers of attorney and wills for Spain as well as advise on Anglo-Spanish matters.

For further information, please contact Antonio Guillen on 07872 808 598.

Patricia Roldan

Picture: Antonio Guillen and Patricia Roldan in a recent consular event.

Returning the keys back to the bank

morguefile com1 (2)A REAL CASE OF A SUCCESFUL DACION EN PAGO

This is a real case that we saw in the office some months ago. For obvious reasons, no names will be mentioned. The important thing is what happened and how the matter was resolved. Let me explain what happened.

 

In year 2006 two friends bought a property in Spain in the peak of the market for the amount of 200.000 €. In that year, the housing prices were high due to the excessive demand and banks granted mortgages like bakers bake muffins: one after the other.

Spanish banks were happy to lend monies because property prices were continuously rising like there was no tomorrow. These two friends got a mortgage for 180.000 € and therefore only had to put 20,000 € from their own money plus another 20,000 for taxes and fees. Total investment into the property was 40,000 € and the rest was brought by the bank.

Not much later the real estate bubble bursted in Spain. Consequently, the housing market declined, housing demand plummeted drastically, the value of the properties decreased and people were not able to pay their mortgages. Banks repossessed the houses and they sold them out in auction; therefore, there were more properties in the market and prices decreased more and more.

In 2014 the two friends realised they could not face the payments of the mortgage and they stopped paying regularly. They also contacted our firm for advice. We informed them that there is an option for people like themselves who are prepared to surrender the keys to the bank and be freed of the mortgage. It is called “dación en pago” and it involves signing a deed whereby the property and title are handed to the bank in exchange of the redemption of the debt. It is not a great solution as it usually involves writing off any investment and money put on the property but at least allows the clients to clear their bad investment in Spain and start from scratch in the UK with no debts. These clients were prepared to take this route and therefore instructed us to talk to the bank and start negotiations.

We contacted the bank, explained our clients’ situation and pushed for a dación en pago. The bank came back to us saying that the value of the property was lower than the mortgage. There was a 30,000 € shortfall and this shortfall had to be paid somehow. In layman terms, the property was now worth 160,000 € and they still owed the bank 190,000 €. The bank wanted to recover the 30,000 € shortfall and the solution offered was that the dacion en pago would be accepted provided that the clients signed a personal loan for the remaining 30,000 €. This option was not entirely satisfactory to the clients but they were prepared to sign the loan if the conditions were affordable.

A few weeks later and while we were in the process of waiting for the bank’s proposal, a debt collection agency was appointed to deal with this matter. The property was valued again and we took the opportunity that a new person was dealing with the file to explore the possibility of a full dacion en pago. We are not sure if it was pure luck or persistency (I have got the feeling that their valuation came higher than they initially thought and probably saw the potential of the property) but the debt collectors accepted the offer of a full dacion and suggested a date for the signing of the dacion. This was excellent news for the client as a full dacion consisted in handing the keys and the title to the bank in exchange of the clearance of the debt. Exactly what they wanted. The only requirement placed by the bank was that the property was transferred up to date of taxes and management fees. These were paid by the clients and we proceeded to sign the necessary deed of dacion en pago which freed the clients from this burden.

It was not the best outcome as this meant losing any investment put into the property but clients got rid of a massive debt that was affecting their finances. Furthermore, clients were aware that if they defaulted in the mortgage, the bank would repossess the property and eventually come after them in the UK for any shortfall due (and believe me there is always a shortfall). A slightly happy ending to a bad story. Obviously not all stories are like this and not all property owners want to get rid of their properties in Spain. Most prefer to keep them and enjoy them during their holidays. Others prefer to let them and wait until the market recovers. However, for those where the mortgage is a burden, there is always this possibility. It is not the panacea but it could allow a person who is struggling financially to clear some debts and start from scratch as a new person with no debts.

 

 

 

MANCHESTER SPANISH FESTIVAL

 

spanish7 

 

 

 

 

 

 

On the 4th , 5th  and 6th September took place the Spanish Festival “Festejar” in Albert’s Square in Manchester which was organised by the company “T3 Events Ltd” and headed by Patrick Marmion, a perfect MC for an event with plenty of “duende” as we say in Spain.

The event started on Friday morning and the Honorary Consul of Spain in Manchester, Antonio Guillen assisted to the event accompanied by his wife, Carmen; his assistant, Patricia Roldán, as well as some representatives of the Council, El Northern and the “Instituto Cervantes”.

We enjoyed the Spanish food and music with singers like Alister Bilbao, Chic Pere and the singer Cadiz-born now living in Barcelona “IZA” who sung and recited some of her interesting flamenco-chill out songs.

The figures confirm that on Friday about 4.000 people assisted to the event. That number increased on Saturday with about 5.000 people who attended the festival to see a Flamenco Demo by the dancers from Instituto Cervantes, and some other leisure activities like the Spanish singer Pol 3.14 and dancing with the rhythm of the DJ Alonso.

The honorary Consul of Spain in Liverpool, Enrique Sanchez, also came to the Festival on Saturday to spend the day with his family, friends and acquaintances.

On Sunday, for those who still had energy, there were Spanish salsa lessons and latin, jazz, funk and Reggae music. It is estimated that 3,500 people attended on that day. Not bad considering that it was Sunday and that it was sunny outside!.

Thanks to companies as La Viña, La Tasca, The Molly House, Churtopia, Spanish Cupboard Deli we had the opportunity to enjoy the Spanish gastronomy with typyical dishes such as paella, churros con chocolate and tapas.

Due to the success of the event, we would not be surprised to see that the event is hold again next year and who knows, perhaps other cities like Liverpool or Birmingham will also give it ago!

Patricia Roldan

How to calculate the Inheritance tax in Spain for non-residents

Tulips Quite often I am asked how much is the tax payable on a Spanish estate. My first answer to that question is that the tax is not paid by the estate but is paid by each beneficiary on the basis of what he or she inherits. My second reply is that the Inheritance tax is calculated on a sliding scale where some coeficients are applied depending on the value of the asset inherited. It is therefore quite difficult to give a quick estimate without having the calculation rates next to me. Rather than using this post to talk about all the intricacies of Spanish Inheritance taxes, I think it would be useful to set up a case study with some imaginary names which would give the reader a taste of how the tax is calculated in Spain.  

Paul Herbert, British national, resident in Manchester dies in the UK on the 18th March 2012. He was divorced and had one daughter. He had assets in the UK and in Spain. There was a Spanish Will dealing with the Spanish assets and a Will dealing with the UK assets.

He left all his Spanish assets to his daughter, Isabel, who is 40 years old and lives in Birmingham. The funeral took place in the UK. The estate comprises a property in Marbella worth 295,000 euros and a bank account with 5,000 Euros. The property had no mortgage.

The house did not have any valuable assets, just the usual furniture for a house of this type.

The daughter is British and has never lived in Spain.

INHERITANCE TAX CALCULATION RATES (€)

 

Tax Base 
up to (€)

Tax liability
euros

Remaining Tax base up to
(€)

Applicable Rate

 

0.00

7,993.46

7.65

7,993.46

611.50

7,987.45

8.50

15,980.91

1,290.43

7,987.45

9.35

23,968.36

2,037.26

7,987.45

10.20

31,955.81

2,851.98

7,987.45

11.05

39,943.26

3,734.59

7,987.46

11.90

47,930.72

4,685.10

7,987.45

12.75

55,918.17

5,703.50

7,987.45

13.60

63,905.62

6,789.79

7,987.45

14.45

71,893.07

7,943.98

7,987.45

15.30

79,880.52

9,166.06

39,877.15

16.15

119,757.67

15,606.22

39,877.16

18.70

159,634.83

23,063.25

79,754.30

21.25

239,389.13

40,011.04

159,388.41

25.50

398,777.54

80,655.08

398,777.54

29.75

797,555.08

199,291.40

onwards

34.00

 

We know that the property was worth 295,000 Euro and that there was 5,000 Euro in the Spanish bank. The tax calculation would be as follows:

 

Real value

300,000

Chattels

9,000 (300,000 x 3%)

Gross Estate

309,000

Expenses  

0

Net Estate

309,000

Taxable Base

309,000

Allowances

Kinship (descendants)

15,956.87

Final taxable Base

293,043.13

Tax liability

 

Up to 239,389.13
Rest up to 293,043.13 (53,654) x 25.50%

Total

  40,011.04
                                                13,681.77

53,692.81

Multiplying rate

1.00 (She has no pre-existent estate in Spain and is the daughter of the deceased)

 

Inheritance tax

 

53,692.81

 How did we get this figure?

The real value is 300,000 € and this includes the value of the property (295,000 €) and the balance in the bank account (5,000 €). When there are no relevant chattels Spanish laws consider that the value of the chattels is 3% of the real value. That is why we have this amount of 9,000 € shown as chattels (300,000 € x 3%).

The funeral expenses were incurred in the UK and therefore cannot be deducted as an expense. We are then left with a Net Estate of 309,000 € which will be used as the Taxable base to which the necessary bases and percentages apply. But before applying any bases or percentages we need to apply the necessary allowance which will vary depending on the kinship. Children have an allowance of 15,956.87 € and therefore the final taxable base will be 293,043.13 € (Taxable base – Allowances).

It will then be a case of applying the tax base and percentages indicated in the table at the beginning of this document. This is done in two stages:

–       Up to 239,389.13 € the amount to pay will be 40,011.04 €.

–       The rest up to 293,043.13 € (in particular 53,654 €, which is the difference between 293,043.13 € and 239,389.13 €) will be calculated applying the appropriate percentage which is 25.50% leaving a second amount of 13,681.77 € to pay.

The tax liability will be the sum of both amounts (40,011.04 € + 13,681.77 €) = 53,692.81€.

Finally, a multiplying rate has to be applied depending on two factors: kinship and the value of the previous estate of the beneficiary in Spain. If the latter is less than 402,678.81 € then the multiplying rate will be 1 (which is the case of the daughter as she has no previous assets in Spain)

The Inheritance tax to be paid by Isabel will be the tax liability (53,692.81Euro) multiplied by the multiplying rate 1 = 53,692.81

Tax to pay is 53,692.81 €

The IHT paid in Spain can be offset in the UK to avoid double taxation.