“FOPDAC was formed over 30 years ago and through the years has been a constant source of information and advice on buying abroad. We have over 200. members and cover a wide number of countries worldwide. All our members have to pass a stringent vetting procedure so that we can offer clients an unparalleled service of professionalism from our in-depth knowledge and understanding of the industry” says Steve Emmett, Chairman of FOPDAC.

When clients deal with a FOPDAC company they are dealing with the very best

What a relief - UK Taxation of Overseas Holiday Homes owned through Companies

“It has been common for many years for investors to purchase holiday homes in the name of companies. Largely this has been to avoid the effects of heavy foreign inheritance tax or to avoid the application of foreign inheritance rules” says Keith Baker of Croft Baker & Co It has been particularly common to buy a French property through a locally incorporated Property Holding Company (Société Civile Immobilière or “SCI”). The UK Revenue was known to be unhappy about such arrangements, considering them to be Benefits in Kind assessable to UK Income Tax, even though the intention underlying the arrangement was to avoid local rules rather than UK rules.

The UK Revenue seems to have accepted the bona fides of such arrangements and announced in the Budget speech that legislation would be introduced exempting any charge. The exemption, assuming it follows the lines of the announcement, will apply to companies

a/ owned by individuals b/ where the overseas property is the only or main asset of the company c/ the activities of the company are incidental to the ownership of the property, and d/ where the purchase is not funded by a loan from a connected company

It is very uncertain of the extent to which the UK Revenue has raised assessments to date but the announcement indicated that the legislation, which will probably only appear in the Finance Act 2008, would have retrospective effect and, provided the conditions described above are met, no assessment is likely to be raised in the period leading up to the enactment of the legislation.

SPAIN

Property Values

A spokesperson for Global Currency Exchange Network says “We are aware of a certain sentiment in the marketplace that Spanish property buying may be slowing down. However, as a company we are still transferring more euros year on year to Spain as each annum passes.

As far as facts go, construction in Spain dropped by 11% in 2006 to a level of 4.9 billion euros worth according to the Bank of Spain. Mortgage applications also fell off as the European Central Bank raised interest rates to 3.75%. The key word to look at is “stability” and the more established investment areas of Spain, Italy and Cyprus offer this in bundles, a fact borne out by years of interest from the British buyer.

98% of mortgagees in Spain take a non-fixed rate mortgage which can of course move depending on where the ECB sets interest rates and therefore rising interest rates which have been seen in recent months could have an effect on purchasing volumes. One has to bear in mind though that interest rates are also on the up globally, including the UK, and so this is not a factor exclusive to Spain and the rest of Europe.”

CYPRUS Title land in Northern Cyprus

“Full English and Turkish Titled Land in Northern Cyprus is internationally recognised”, says Simon Burchell of Burchell Edwards Overseas. “Whilst there has been a lot of rhetoric about ownership when buying in Northern Cyprus the facts are that if you are sensible in your approach then you can truly own a home in this unspoilt part of the island at a fraction of the cost in Southern Cyprus.”

Firstly, you must choose a professional estate agent, an established reputable Construction Company or Developer and most importantly a reliable Lawyer with qualified experience in both English and Cypriot Law who also speaks fluent English and Turkish. There are many pitfalls when purchasing land and property here and you need expert advice and guidance to ensure the process is smooth and satisfactorily concluded.

The history of this island is both passionate and complicated and you personally should research the actual events that have taken place over the years to satisfy your understanding of both the Turkish and Greek involvement.

Concludes Simon, “As a company, we do not promote any developments on land which does not have full title deeds. We offer a safe, personal and comprehensive service to owning a property in Northern Cyprus.

SPAIN Tax Laws There has been a change in the tax laws in Spain which means that all property owners are now to be treated equally with capital gains tax at 18% of the declared gain.

If a resident is aged 65 years or over they are exempt from this tax, as long as they have lived in the property for three years. In addition the existing 5% retention will be reduced to 3% and this can be subtracted from any capital gains tax that has to be paid.

“Whilst this is not a tax that purchasers need make at the moment of purchase, it is nevertheless something that they should be aware of”, says Des Rowson of DLR Properties. “If you are considering investing in Spain it is important to know that non residents buying property will be given a Fiscal Number (NIE). The solicitor acting on behalf of the purchaser will obtain this for the client and it must be in the hands of the purchaser before a completion can be made. This is part of new legislation which commenced in January of 2007”

-Ends-

FOPDAC www.fopdac.com 0870 350 1223

Croft Baker & Co 0207 736 9520 www.croftbaker.com

Global Currency Exchange Network Ltd 01622 816940 www.gcen.co.uk

DLR Properties Overseas 01206 303049 www.dlr-properties.co.uk

Burchell Edwards Overseas Ltd 01564 771941 www.BurchellEdwards.com

PRESS For further information on any of the subjects quoted above, please contact Nightingales PR 01825 744091 linda@nightingalespr.co.uk For same day service.