March 15, 2019
Wealth and tax planning was an important subject for the Spanish market during the course of 2018. Fuelled in part by the government’s proposed tax measures as part of its provisional budget for 2019; measures that could have had a significant impact on high net worth individuals. These measures included, for example, rises in marginal rates of tax on personal income and savings, an increase in the marginal rate of wealth tax and aggressive tax measures (including in connection with the transposition of the Anti Tax Avoidance Directive, or ATAD). What’s more, the government’s proposed measures seemed to target instruments used as vehicles for financial and property investment for high net worth individuals and sophisticated investors, such as SICAVs (open-ended investment companies) and SOCIMIs (listed real estate investment companies).
Even if the current government failed to obtain approval for its 2019 budget and associated tax measures, it is worth speculating on the tax measures that could be adopted if the political parties that support the current government were to obtain a sufficient majority in the Parliament and/or Senate when the next elections are held in April 2019.
Against this background, life assurance maintains its appeal as instrument of choice, not only for Spanish high net worth individuals, but also for expatriate customers, who have moved to Spain and wish to manage their assets with a view to planning for their family and the transfer of these assets from one generation to the next, while complying with the applicable laws and regulations, including with respect to tax.
On the subject of expatriate customers, it is worth noting that during the past few years, Spain has appealed to Latin American high net worth individuals, who seek a secure environment for themselves and their families in a country with a culture similar to that of their country of origin. To this end, life assurance can also play a role in terms of wealth planning, insofar as it is an instrument that is not only fully recognised in Spain, but also in many Latin American countries (Mexico, Colombia, etc.).
To learn more about this subject, come and listen to our expert Gonzalo García Pérez, at the Farad Finance Forum, on 19 March 2019, at 3pm.