Spanish plans to scrap IHT could give expats a lift
Thursday, September 18, 2008 @ 11:17 AM
The Spanish government’s plan to scrap inheritance tax may indirectly help British expats by restarting the housing market and easing the financial pressure they are under.
Spain's prime minister José Luis Rodríguez Zapatero (pictured) has re-opened talks to do away with IHT and although Steve Laird, principal of Carrington Wealth Management, does not believe that British expats will benefit from the changes directly, they could help indirectly.
‘I do have some initial cynicism,’ he said. ‘The Spanish government is trying to please its voters, not expats, so I think there will be something in there that abolishes IHT for recipients living in Spain which would make it less attractive to expats because the majority of them don’t have children living in Spain.’
Laird, who splits his time between Spain and Belfast, said that scrapping IHT could, however, help re-stimulate the housing market and property in Spain could once again become attractive for Brits.
‘Spain has been hit by the credit crunch the same as the rest of Europe, particularly in housing because around 30% of the country’s GDP is from construction,’ said Laird.
‘Expats have been hit doubly hard because of the poor exchange rate. The Brits are not flocking out to Spain as much as they were and those out here are under serious financial pressure.’
Laird also points out that holding money in an offshore deposit in Jersey or Guernsey, a common practice among expats, would be detrimental for their investments by not keeping pace with inflation and being hit by exchange rates.
Source: Citywire.co.uk