How to make Spanish property pay
By Mike Goodman
(Filed: 01/02/2005)
A lending and investment scheme aimed at British owners of Spanish property is being devised by the Premier Group, a leading Isle of Man investment firm.
The final tax and legal details are currently being completed, with a launch expected in March.
The idea is to help Spanish homeowners release cash from their property for investment. This may help plan for retirement or for Spanish inheritance tax liability, which can bite more deeply than its UK equivalent as there are fewer exemptions.
Many Britons who bought homes in Spain 15 or 20 years ago for a few thousands have seen the value of their homes rise 10 fold. The effect of borrowing against the property will reduce the net estate liable for inheritance tax.
Charles Walton, Premier's sales manager based in Southern Spain, said: "The customer takes out a loan on their Spanish property which is used to buy an investment portfolio. The loans are interest only."
He admitted there are risks involved as the investment portfolio may grow too slowly to produce enough funds to repay the loan. But he added: "There are safeguards against this happening. The loan can be at a fixed rate while among the choice of investment links we offer is a capital protected fund."
There are two other schemes of this type currently on offer, both of which involve Luxembourg private banks.
The Premier Group which specialises in property and cash funds has grown funds under management to £250 million since its launch in May 2001, according to Mr Richardson, who ran two offshore life offices before heading up the group.
Source:
www.telegraph.co.uk/global/main.jhtml?xml=/global/2005/02/01/fispanish.xml&sSheet=/global/2005/02/02/home.html
