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The latest in the law LEGAL NEWS


20 | ROUND UP What’s it about?


This is a new column. Over 70 lawyers and accountants around the world have agreed to keep us informed about any new developments in the law in their country that they think are of particular interest to the overseas property industry. This month most of the news relates to Spain and Portugal. We are work-


ing hard to change that! If you know of some legal news that we ought to know about, contact john.howell@opp.org.uk. Alternatively, if you know of a good, reliable lawyer who might be prepared to help, please do the same.


Fines for illegal lets in Tenerife


The most important of this month’s legal news from our correspondents around the world. More legal news is available in the News section at www.opp-connect.com


Subsidies to buy property in Spain The Spanish minister of Public Works, Ana Pastor, has declared that the government has no intention of removing the existing subsidies for the purchase of properties by residents in Spain. Ana Pastor´s statement is contrary to


the advice given at the end of the year by the European commission. Brussels recommended the end of the property subsidy and reminded the government that it contributed to the property bubble. In the same statement made to Europa press, the minister of Public


“The Spanish government is aiming to boost the rental market with less red tape”


Works said that the government is aiming to boost the rental market with less red tape. It is the Spanish government´s intention to modify the existing rental law and the code of common law procedure to give better protection and more freedom to both landlords and tenants.


The minister also advised that she will stimulate the purchase of Spanish properties by non residents through taxation policies. She aims to attract the foreign investment in the Real Estate market. Within those policies she also intends to make more fl exible the current law for property investment companies (Socimis). Cesar Garzon, who is principal


“Under English law there are very few agreements which have to be in writing and signed to be enforceable, although there has to be clear evidence of what was agreed,” said Oxley & Coward commercial law expert Mamoon Chaudhary. “A string of cases over the past decade have established that an email exchange can constitute an ordinary contract and that a typed name at the foot of an email message can be a signature. This case confi rms that an exchange of emails can be treated as a written document for the purpose of the Statute of Fraud.” The 1677 Statute of Frauds


states that certain contracts, such as


at spanishlawconsultants.com, is a Spanish abogado. E: c.garzon@spanishlawconsultants.com W: www.spanishlawconsultants.com


Emails as evidence in the UK


The Letting Law on the Spanish island of Tenerife, which has been in place since 1995, is now being implemented with a number of inspectors being put on the streets to unearth illegally let holiday properties.


€18,000 is the minimum fi ne for an


owner. The fi ne can also be extended to rental agencies.


Although laws should be adhered to, surely this is not the time for a Government to go after villa owners with such vigour and draconian fi nes. The island must surely want investors to purchase properties and by letting them, ensure that the local area benefi ts from the visitors in everything from their local bars and restaurants to their shops and water sports facilities. This approach, which has just been announced, will scare off anyone considering buying a property in Tenerife. Richard Way is editor at The Overseas Guides Company. E: Info@OverseasGuidesCompany.com W: www.overseasguidescompany.com


When tax planning goes wrong The recent First Tier Tribunal case of Greene King plc highlights some risks


guarantee or land sale will only be enforceable if in writing and signed by the person to be bound or by someone on his or her behalf. Marmoon Chaudhary, who is a lawyer specialising in commercial law at Oxley & Coward, solicitors. E: company@oxcow.co.uk W:www.oxcow.co.uk


www.opp.org.uk | JULY & AUGUST 2012


OPP’s global correspondents keep us updated with the legal changes that those in our industry need to know about. This month Spain and Portugal, in particular, have seen a plethora of interesting legal news stories this month – from crack-downs in Tenerife to unprecedented decisions in Portugese courts.


of tax planning. A trading subsidiary owed its parent company several hundred million pounds of genuine commercial debt, interest on which is and was fully tax- deductible. By assigning to another group company the right to receive the interest on the loans (while retaining the right to receive the capital repayment), the group hoped (because of the particular way in which the right was assigned) to make sure that, while the interest paid remained deductible for the payer, noone paid tax on the interest received. The case revolved around


“A number of inspectors in Tenerife are trying to unearth illegally let properties”


the complexities of the corporate Loan Relationship rules. Sadly, not only did the First Tier


Tribunal judge hold that the planning did not work as intended, he concluded that far from no-one being taxable on the interest, two companies in the group were both taxable on what was economically the same receipt. Nor did he have much sympathy with the taxpayer’s protestations of foul play: “We are unimpressed with [the] argument that our conclusions... might lead to double taxation. As we have said, the transactions were a device for ensuring that relief for payment was not matched by taxation of the receipt; and the appellants have no evident diffi culty with that outcome.


“It does not seem to us that they can legitimately complain if the scheme fails in its purpose and instead results in their paying tax twice.” BKL Tax, a division of Berg Kaprow Lewis LLP E: info@bkltax.co.uk W: www.bkltax.co.uk


Surrendering your property to settle a loan in Portugal A judge from the Court of Portalegre has accepted the handing over of a property to a bank as repayment of the full amount of the loan secured


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