Authored by E&G Solicitors in Spain

Inheritance tax in Spain can be relatively complex compared to inheritance tax in the UK.  There are some fundamental differences that are set out below.  In addition, the nil-rate band and various other deductions vary depending upon the location of the assets in Spain. 

Hence if you are inheriting assets in Spain it is recommended that you seek expert Spanish legal advice at an early stage in order to avoid problems in the future. 

1. Current Spanish Inheritance tax rates

Depending upon where in Spain the property of the deceased is located, Spanish inheritance tax rates will vary and the total amount of inheritance tax payable will depend upon the reductions available and the relationship of the beneficiary to the deceased.

2. Inheritance Tax in Spain – How does it work?

Beneficiaries closely related to the deceased may benefit from a nil rate band.  That means that if the share of the estate they inherit is below the nil rate band, they will pay no inheritance tax in Spain. 

If inheritance tax is payable, the rate of tax depends upon the value of the assets to be inherited.  The higher the value of the assets, the higher the rate of taxation. 

In addition, each of the 17 autonomous communities in Spain are entitled to offer further reductions to the inheritance tax payable.   Many do. 

3. Inheritance Tax in Spain – Jointly Owned Property

When a property is jointly owned by two people in equal shares, a 50% share of the property will not pass automatically to the surviving owner under any circumstances.  Instead it will always pass according to the will of the deceased, or failing that according to the applicable intestacy rules.

Upon the death of one owner the administration of the estate of the deceased must be completed before the surviving owner can sell, transfer or mortgage the property. 

When the acceptance of inheritance is completed it may be that there is some inheritance tax to pay in Spain.  In the vast majority of cases a surviving spouse or a child will pay no Spanish inheritance tax, or a very small amount, as a result of the available nil rate band.

Because of this situation a number of companies exist purporting to solve this problem by advising you to form a company.  Please read our article on the subject to find out why this approach is not recommended.

4. Inheritance Tax in Spain – Brexit

Notwithstanding that the UK has left the EU, the rules regarding the imposition of inheritance tax have changed in Spain to such an extent that Brexit does not affect at all the amount of inheritance tax payable by those resident in the UK, as everyone inheriting in Spain, no matter their nationality or country of residence, is now subject to to the same rules as those resident in Spain.

5. How can Spanish inheritance tax be minimised?

When it comes to calculating the inheritance tax payable in Spain each beneficiary benefits from a nil rate band.  That means that if the share of the estate they inherit is below the nil rate band, they will pay no inheritance tax in Spain.

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Bankruptcy and insolvency are related. Most people who find themselves in either state are able to address their finances in such a way that they eventually leave these situations behind them. This article will explain how bankruptcy and insolvency are different.

Chief Difference Between Bankruptcy and Insolvency

Bankruptcy is used to refer to a state that an individual is in, where they cannot repay their debts to their creditors and are seeking relief from all or some of those debts. Insolvency is similar but it is used for partnerships and limited companies. In fact, insolvency can be used to accurately describe all types of financial failure.

Types of Insolvency

With insolvency, a company or individual is unable to pay their debts when they become due. if two partners in a business are unable to pay the debts of the business, they could be described as insolvent but they could not jointly be described as bankrupt. If a public or private company has liabilities that exceed what they own, they are described as insolvent.

Liquidation is a particular type of insolvency that is used for limited companies or partnerships when they can no longer pay their debts. The company is brought to an end and its assets are redistributed. Administration and debt relief orders are other types of insolvency which are applied to businesses.

Personal Insolvency

Bankruptcy is not the only type of personal insolvency. Other kinds of personal insolvency include debt management plans and individual voluntary arrangements. Some people try to avoid bankruptcy and enter into a debt management plan.

A debt management plan doesn’t have the negative effect on their credit that bankruptcy does and they can often get back on a solid financial foundation more quickly. Bankruptcy involves legal proceedings and you can ask a lawyer who specializes in the area for help with the entire court process.

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Sometimes it’s difficult or impossible to avoid a personal or business financial crisis. In some cases, your last resort for relief may come from filing for bankruptcy.

Are you unable to meet your financial obligations that you risk wage garnishment? Are you receiving harassing calls from creditors or facing lawsuits for unpaid debts?

If so, you might want to consider declaring bankruptcy.

Well, here are the bankruptcy advantages:

1. Trigger the automatic stay provision

The provision temporarily halts actions by the aggressive creditors, collection agencies, and government agencies to recover the money you owe them in debt.

Once you’ve been granted an automatic stay, the creditor won’t call you again, send any letters, file a lawsuit against you, or repossess properties you put up as collateral.

A bankruptcy order can also prevent foreclosures, evictions, and wage garnishments.

However, certain exceptions may apply.

2. It is possible to wipe out some debt obligations

If a court gives you a bankruptcy discharge, it relieves you of the responsibility to repay some of your dischargeable debts. In other words, the debts get eliminated for good.

The dischargeable debts you’re most likely to benefit from include:

  • Medical bills
  • Credit card debt
  • Utility bills
  • Personal loans from friends, colleagues, family members, etc.

3. Credit score benefits

Bankruptcy records can stay on your credit history for up to 10 years. But think about the negative impact defaults, missed payments, lawsuits, and repossessions will have on your credit.

Declaring yourself bankrupt can help improve your credit rating, especially after the dischargeable debts have been wiped out.

4. Gives you a chance for a fresh start

While filing for bankruptcy won’t clear your debt burden, you will have time to put things in order and rise again.

It is mentally freeing, and you can seek financial counseling to come up with a practical strategy to repay and balance your debts.

Declaring bankruptcy is not for everyone, though. It is best to consult with an experienced bankruptcy trustee or lawyer to evaluate your case’s unique financial circumstances. That way, they can advise you on the best course of action.

Links

https://www.rocketlawyer.com/gb/en/quick-guides/advantages-and-disadvantages-of-declaring-bankruptcy

https://www.arnoldsmithlaw.com/advantages-and-disadvantages-of-filing-for-bankruptcy.html

http://thebankruptcyservice.co.uk/bankruptcy/advantages

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Going bankrupt is never easy – but it does not have to be a hard thing to understand.

There are both good things and bad things about it, and you should know about them to make smart financial decisions.

Find out what is and how does bankruptcy work down below!

What is bankruptcy?

Bankruptcy is a complex process that helps an individual deal with his or her debts. Depending on where you live, declaring bankruptcy could help you get rid of all your debt or a percentage of it.

The point of bankruptcy is to help people troubled with debts to get a clean, fresh start. Even though it is not a free-get-out-of-jail card, declaring bankruptcy could work as the first step towards a new beginning for a lot of people.

How does bankruptcy work?

Depending on the type of bankruptcy you declare, there are two possible scenarios:

  • The first, and most common one, is when you declare bankruptcy and you get liquidated. The state will appoint a person to oversee your assets, debts, and to communicate with your creditors. You will lose most if not all of your assets. Most if not all of your debt will be forgiven.
  • The second, and less common one, happens when you request time to pay your creditors. You’ll usually get a 3- to 5-year plan to restructure your financial situation. If you decide to follow this option, you’ll get to keep certain assets and manage to eliminate all your debt.

What happens after I declare bankruptcy?

Bankruptcy is far from over once you declare it. There’s a long period (that can take several years) where you won’t be able to get loans, credit cards, and other financial-related stuff.

After that time period is over, you’ll usually have to build your credit back up. You’ll be debt-free and ready to start a new life.

Keep in mind certain debts, like alimony, won’t be forgiven when you declare bankruptcy.

Links

https://www.uscourts.gov/services-forms/bankruptcy

https://www.uscourts.gov/services-forms/bankruptcy/bankruptcy-basics

https://www.investopedia.com/terms/b/bankruptcy.asp

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Protection. This is one of the most used words associated with bankruptcy. However, there are some details and information imperative to know to rightly protect yourself against it.

What does “Bankruptcy Protection” actually mean and what are the things you must do concerning this.

Bankruptcy Law means Federal Law. All bankruptcy cases are filed and administered in Federal Courts and are found in the Title 11 of the United States Code.

This will protect you because the power of the Federal Court is superior to the State Court’s power because of the supremacy clause of the United States Constitution.

Bankruptcy Law offers protection. This law is powerful and entails heavy penalties for the creditors who violate it by trying to enforce any claims or judgements against the debtor. Any lawsuits or judgements issued by the state court against them will automatically become legally unenforceable.

This law can help avoid economic enslavement.

Filing bankruptcy can protect the rights of the people. This right holds to become self-evident, non-negotiable, and God-given. In simple terms, this is the right to be ‘left alone’ and to be able to pursue happiness and reap the benefits of their hard work.

Once you file a bankruptcy case, an automatic issue ‘Automatic Stay’ is ordered, wherein creditors are not allowed to contact the debtors by any means. The creditors do not have the right to sue you or continue any lawsuit they have filed against you.

When you have no resources to pay for your debts, filing for bankruptcy is both an ethical and correct thing to do. It is a fair move to provide creditors a transparent report of one’s financial situation through filing a petition and providing evidence.

Evidence that the debt can not be paid because of the financial situation of the debtor, providing the freedom to start over.

At the end of it all, bankruptcy mainly protects your freedom. Life itself. Why? because capitalism involves risk. Without this risk, there is no gain, and without it, we lose any economic progress.

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The terms bankruptcy and insolvency are often interchanged, but that is a mistake.

They don’t mean the same thing. Bankruptcy involves a person or business liquidating assets through legal means to pay some debts and to eliminate others.

There are several types of bankruptcy someone can apply for. It depends on their circumstances and where they reside.

Insolvency means the debts of someone or a business are currently more than their assets. For example, a new business may owe a great deal for the building and startup costs.

They aren’t making a profit yet but they are still functional. Such a business may be in the process of saving the business by reorganizing.

One of the ways they do this is to discuss the debt they owe with each creditor.

The creditors may extend the terms or suspend payments for a given amount of time. Others may reduce interest or even reduce the balance due.

The goal is to get the debt to a manageable amount where they can knock it out and start making money again.

Insolvency Legal Efforts

When the efforts on their own aren’t successful or they aren’t enough, the legal side of it may be necessary. A person or business can file for insolvency through the courts.

This is a chance to legally reduce debts or to restructure them. Not everyone qualifies for bankruptcy or wants that on their record. This may be a better choice to consider.

Input with Legal Bankruptcy or Legal Insolvency

From a legal point of view, there is very little input from the person or business with legal bankruptcy.

The law determines what will be paid and how it will be paid and they must comply with those requirements.

Legal solvency is the opposite as the person or business comes to the court with a plan of action. They will accept it, deny it, or request modifications before they can approve it.

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The GDPR includes provisions that promote accountability and governance. These complement the GDPR’s transparency requirements. While the principles of accountability and transparency have previously been implicit requirements of data protection law, the GDPR’s emphasis elevates their significance.

Billy Muir works for LBJ consultants, an from Outsourced HR and Training Provider

“You are expected to put into place comprehensive but proportionate governance measures. Good practice tools that the ICO has championed for a long time such as privacy impact assessments and privacy by design are now legally required in certain circumstances.”

Ultimately, these measures should minimise the risk of breaches and uphold the protection of personal data. Practically, this is likely to mean more policies and procedures for organisations, although many organisations will already have good governance measures in place.

Under the GDPR, the data protection principles set out the main responsibilities for organisations.

The principles are similar to those in the DPA, with added detail at certain points and a new accountability requirement. The GDPR does not have principles relating to individuals’ rights or overseas transfers of personal data – these are specifically addressed in separate articles (see GDPR Chapter III and Chapter V respectively).

The most significant addition is the accountability principle. The GDPR requires you to show how you comply with the principles – for example by documenting the decisions you take about a processing activity.

Lawful processing

For processing to be lawful under the GDPR, you need to identify a lawful basis before you can process personal data. These are often referred to as the “conditions for processing” under the DPA.

It is important that you determine your lawful basis for processing personal data and document this.

This becomes more of an issue under the GDPR because your lawful basis for processing has an effect on individuals’ rights. For example, if you rely on someone’s consent to process their data, they will generally have stronger rights, for example to have their data deleted.

The GDPR creates some new rights for individuals and strengthens some of the rights that currently exist under the DPA.

The GDPR provides the following rights for individuals:

1. The right to be informed

2. The right of access

3. The right to rectification

4. The right to erasure

5. The right to restrict processing

6. The right to data portability

7. The right to object

8. Rights in relation to automated decision making and profiling.

The GDPR includes provisions that promote accountability and governance. These complement the GDPR’s transparency requirements. While the principles of accountability and transparency have previously been implicit requirements of data protection law, the GDPR’s emphasis elevates their significance.

You are expected to put into place comprehensive but proportionate governance measures. Good practice tools that the ICO has championed for a long time such as privacy impact assessments and privacy by design are now legally required in certain circumstances.

Ultimately, these measures should minimise the risk of breaches and uphold the protection of personal data. Practically, this is likely to mean more policies and procedures for organisations, although many organisations will already have good governance measures in place.

The GDPR will introduce a duty on all organisations to report certain types of data breach to the relevant supervisory authority, and in some cases to the individuals affected.

What is a personal data breach?

A personal data breach means a breach of security leading to the destruction, loss, alteration, unauthorised disclosure of, or access to, personal data. This means that a breach is more than just losing personal data.

The GDPR imposes restrictions on the transfer of personal data outside the European Union, to third countries or international organisations, in order to ensure that the level of protection of individuals afforded by the GDPR is not undermined.

How can I demonstrate that I comply?

You must:

a.   Implement appropriate technical and organisational measures that             ensure and demonstrate that you comply. This may include internal      data protection policies such as staff training, internal audits of             processing activities, and reviews of internal HR policies.

b.   Maintain relevant documentation on processing activities.

c.   Where appropriate, appoint a data protection officer.

d.   Implement measures that meet the principles of data protection by            design and data protection by default. Measures could include:

  Data minimisation;

           Pseudonymisation;

a.   Transparency;

b.   Allowing individuals to monitor processing; and

c.   Creating and improving security features on an ongoing basis.

d.   Use data protection impact assessments where appropriate.

You can also adhere to approved codes of conduct and/or certification schemes.

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Unexpected costs are amongst some of the main reasons that landlords go into bankruptcy. According to nh-law.co.uk, there are new laws making it easier than ever for tenants to sue their landlord.

Here are some things that you need to know (note that this applies to tenants living in England only):

  • If your tenancy agreement was signed before 20 March 2019, and your tenants feel that you failed to provide them with a safe and healthy living environment, they can use Homes Act 2018 to file a complaint against you.
  • Everyone that has a secure tenancy agreement or statutory tenancy can use Homes Act 2018 (regardless of when their tenancy began).
  • Your tenants can sue you over a variety of issues, some examples are:
    • The house is already cold and damp.
    • You failed to carry out necessary repairs or maintenance.
    • Mould growth.

Under the Landlord and Tenant Act 1985, the responsibility of investigating living conditions was given to the local authorities which cause the local councils to suffer from budget cuts and staffing issues. This is the reason why some landlords are free to skimp the cost of repair and maintenance of their house, leaving tenants to deal with the consequences.

Under Homes (Fitness for Human Habitation) Act 2018, you must be accountable for the houses that you are renting out. You need to make sure that the property is fit to live in. Here are some things that you have to maintain:

  • ventilation;
  • damp;
  • cold; and
  • other issues that go beyond just repair.

Homes (Fitness for Human Habitation) Act 2018

The Homes (Fitness for Human Habitation) Act 2018 came into force on the 20th of March 2019. The purpose of the new law is to ensure that the rented properties are fit to live in. These properties should:

  • Be safe and secure.
  • Have a healthy environment.
  • Free from things that could cause serious harm to tenants.

Make sure to provide a safe, secure, warm and dry home for your tenants so you can avoid being taken to court. Note that the court can also require you to pay for compensation.

Your responsibilities as a landlord

According to the new laws, your home must fit for human habitation, this includes health and safety issues that may cause your tenants or anyone else in serious harm.

It does not matter what kind of property you are renting out; what matters is the agreement that you have with your tenants.

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The ideal goal when filing for bankruptcy protection is to resolve your debts. There are a lot of different ways that you can achieve this ⁠— including Chapters 7, 11, and 13. For each of the different types of bankruptcy, debt can be eliminated when certain criteria are met or under certain conditions. A bankruptcy lawyer can explain the differences between the types of bankruptcy for you to choose which suits you best.

However, there are a few possible outcomes that can result from the proceedings regardless of what type of bankruptcy you file. Two of those outcomes include “discharge” and “dismissal”. Although discharge and dismissal are similar-sounding words, anyone filing for bankruptcy protection needs to understand that these two hold vital differences.

Discharge vs. Dismissal

When you enter into bankruptcy, the goal of the filing is generally to discharge your debt. It means you no longer have to repay your debt and it is no longer collectible by the company or entity to whom it was owed.

For example, eligible unsecured debts such as credit card bills are discharged at the end of the bankruptcy when you filed for Chapter 7 protection. Creditors cannot collect the debt listed on your credit report and you are no longer obligated to pay any of those discharged debts. Although the process is different, Chapters 11 and 13 can also result in the discharge of some debts.

A dismissal, on the other hand, does not mean that any debts are wiped clean. It means that the bankruptcy case is dismissed by the judge and will not continue to go forward. Thus, creditors can continue collecting the money that you owe or owed on your debts from you.

When does a dismissal occur?

Dismissal is something that you do not want to associate your case with as it will leave your financial problems unresolved. A dismissal can occur when something has gone wrong such as failure to follow through with the required obligations of your bankruptcy proceedings or if the judge believes that you are not eligible for bankruptcy, perhaps because you just filed recently.

Avoiding a dismissal should be a top priority for those who want to go through bankruptcy proceedings. A bankruptcy lawyer can help you with your bankruptcy case so you will be able to avoid this undesirable outcome and instead end up with an eliminated debt.

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When you have filed for bankruptcy with the help of a bankruptcy lawyer and have completed the process and had your debts discharged, it is time to begin the process of bouncing back and rebuilding your credit.

CBS News, in an article, provided general tips to debtors which include monitoring your credit, submitting letters of explanation to the credit reporting agencies about your financial difficulties, getting approved for a credit card, using your credit card in a smart way, and paying it off each month.

These tips are great—but your bankruptcy lawyer can provide you with even more detailed advice on how to go about rebuilding your credit.

Tips from a bankruptcy lawyer: How to bounce back after bankruptcy

When you want to rebuild your credit after bankruptcy, as CBS News pointed out, you will need to get your source of credit. Although this proves to be a challenge, secured credit cards should be available to individuals almost as soon as their bankruptcy filing is complete. A secured credit card is a type of credit card that is backed by a cash deposit from the cardholder which acts as its collateral. In other words, you might get a $500 line of credit, but you will have to make a $500-deposit in an account held by the creditor that may be used to pay your bill if in case you can’t pay it back yourself.

Once you have the secured card, you will need to use it to make small purchases. Keep your use of the card below 30% of the credit amount available for you as your scoring will be penalized by credit bureaus if you maxed out your card. Always pay your bill in full since secured cards have high interest rates and since you don’t need to carry a balance to improve your credit.

After some time making on-time payments with your secured card, your credit score should improve enough that you may be able to get an unsecured card. You may also be able to qualify for a home mortgage in just 1 year after a Chapter 13 filing or 2 years after filing a Chapter 7.

Getting help from a bankruptcy lawyer

When you go through the bankruptcy process, your bankruptcy lawyer will provide you with comprehensive support and advice from getting rid of your debts to what you need to do to improve your credit and finances after bankruptcy. Take advantage of the advice made available to you and get an expert opinion from a bankruptcy lawyer today.

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